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EUROPE’S BUSINESS NEWSPAPER 


FINANCIAL TIMES 


No.30,624 


Wednesday August 24 1988 


D 8523 A 


JAPAN’S HOPES 

Takeshita’s modest 
aims In Peking 

Page 3 




IIS 


f 


World N ews 


Controversy 
over Quayle 
dominates US 
campaign 

Controversy over 
Vice-President George Bush's ■ 
choice of Senator Dan Qoayle 
as his miming mate for the 
US presidential election in 
November increasingly; rtrrniU 


Embarrassing new charges 
were made about the 41-year- 
old Indiana Senator’s past, fol- 
lowing allegations that he used 
family contacts to avoid fight- 
mg in Vietnam. Page 4 

Burma protests 

More than half a million people 
took part in pe&ceftil demon- 
strations against Burma’s 26* 
year-old socialist Government. 
Pages 

Iran accuses Iraq 

Iran alleged Iraqi forces were 
massing for an attach on the 
central Gulf war front, bat the 
UN said the ceasefire was hold- 
ing. Pages 

Afghan dump blast 

A Soviet spokesman confirmed 
that an explosion took place 
at an ammupt ioa dump at 
Kilagay, north of Kabul. on 
August ll. Be said there were 
no fatalities atthougfarebel 
sources said up to 600 died. 

UN Cyprus talks 

Greek-Cypriot President 
George Vassilioo and Turkish- 
Cypriot leader Rauf Denktash 
had separate meetings with 
UN Secretary-General Javier 
Perez de Cuellar in Geneva. 
Good atmosphere. Page 2 

Bqfumbwa curfew 

The Burundian capital, Bujum- 
bura, was said to be under cur- 
few following tribal massacres 
In the north of the country 
in which thousands died. 

Angola taBts rsstsrt 

Cuban, Angolan and Sooth 
African delegate* arrived in 
Uw Congolese capital, Braczft* 
vttte. for a ffflfc rotted of US- 
sponsored peace talks on 
southern Africa. Page 3 


Nopal toll i 

The Nepalese authorities 
revised the i r esti mat e of the 
death toll in Sunday's earth- 
quake to more than 1,000. 
Another 200 people died in 
northern India.- : - 


Korsa talks dus 

North and Soutfa Korea were 
due to hold a private meeting 
today at the border village of . 
Panmunjom, in a bid to 
arrange talks mi rale for 
Pyongyang in next month's 
Olympic games. 

Floods Mt Burkina 

Two peopfoirdxeidfied and 
at least 4,500 made homeless 
by torrential rains in the Sahe- 
lian state of Burkina Paso. 


SA Wimpy Bar bomb 

At least 25 people were seri- 
ously injured when a bomb 
exploded in a Wimpy fast food 
restaurant in the Smith Afri- 
can city of .East London. 


West ftsitk mavss 

[ The Palestine Liberation 
! Organisation saW ft would take 

; responsibility for dvfl servants 

! sacked when Jordan cut its 
; \ ties with the Israehoccopied 
• \ West Bank last month. Israel- 
flo dash. Page 3 


independence foam Moscow 
at a rally in the Baltic republic 
to ootnnxsnwde the 1939 _• 
Nad-Soviet pact which brought 
it under Sowtdoittrd. 


Business Summary 


Hearing on 
BAT bid for 
Farmers 
postponed 

INSURANCE regulators in 
Kansas postponed for two days 
the stark of a hearing on the 
J5.Q5bn bid by BAT Industries 
for US insurer Farmers Group, 
triggering speculation on Wall 
Street that a deal between the 
two groups was about to be 


BAT and Farmers themselves 
sought postponement of toe- 
hearing from the state’s insur- 
ance department having been 
in secret talks In California, 
since late last wed., 

BRITAIN’S economy continued 
to grow at an exceptional pace 
into the three months to June, 
according to official figures 
published yesterday, reinforc- 
ing fears that the economy was 
growing too rapidly, leading 
to inflation. Page 7 

TM PBBTAT. H tfmW f nihtK - 

tries, Britain’s biggest chemi- 
cals company, winselltts 
European silicones business . 
to Rhdne-Pouienc, the state- 
owned French group for £30m 
($50.4m). Page 15 

CAMBRIDGE ELECTRONIC 
Industries, floated off by Dutch 
electricals and electronics 
group Philips in 1981, has 
retained to its parent to buy 
two US electronic component- 
businesses for a total of about 
354m. Page 15 

HONGKONG and Shanghai 
Banking Corporation, toe col 
any*B biggest bank, which last 
year acquired 14L9 per cent of 
Midland Bank of the UK, 
pushed up its interim dividend 
following strong first-half prof- 
its. Page 15 

BEATRICE: Donald Kelly ; 
flamboyant chairman of the 
diversified food concern, is to 
resign as head of th*> company 
betook private in one of the 
largest leveraged buyouts in 
US corporate history two years 
ago. Page 15 

DEN NORSKS CredKfaank, 
troubled roaw t tfincrmun i er - 
-atel bank, announced aTatfical 
res t r uc t u ring off the bank into 
four main divisions and new 
appointments to head them, 
following NKrl5bn (3214m) 
losses for 1S87 on loans and 
securities. Page 17 

STATOHc Norwegian state 
oil company's financial prob- 
lems were underlined when 
it called for a state cash injec- 
tion of at least NKxSbn (3429m) 
to sustain operations at cur- 
rent level. Page 7, page 17 

SAMPO, Finnish insurance 
group, plans to raise FMSTOm 
(3220m) through a ane-for-two - 
rights issue which w£D raise 
its stare capital by 48 per emit 
Page 17 


APPLE COMPUTER has decen- 
tralised its operations into four 
autonomous divisions to bettor 
handle its rated growth; it is 
aiming 1 or sates c£ some gtifon 
by. the early 1990s. Page 16- 


TOOTSIE RoHIminrtries. Chi- 
cago-based maker of tfretnla- 
mous Tootsie RoB one of the - 
best known sweets in the US. 
plans to purchase New Jersey 
bubble-gum maker, Charms. 
Page 16 

-DEERE, the world's largest 
manufacturer of farm equip- . 
wMit saw its recovery continue 
in its third quarter with a rise 
in net profits for the three 

months to 381m up from 
3255m in the same period last 
year. Page 16 . 

AUSTRALIA announced a 
. rhawge in banking regulations 
to remove the distinction . 
between trading and savings . 
banks, and reduce the amount 
banks are required to phtoe 
as low-interest deposits with 
the central bank. Page 18 


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West Tax Crodv ; 
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France to ease embargo on oil from Iran 


By ten Davklaon In Parte 

THE French Government is to 
ease the 12-month-ted embargo 
on ofl imposts horn Iran, by 
totroducing a barte- system for 
■swapping Iranian oil imports 
against French exports. 

It appears probable that 
France will supply food and 
agricultural products, which 
are in short supply in Iran. 

But ncMiw the rigfarila DOT 
even the scale of the new bar- 
ter arrangements have been 

announced, -and they are not 
expected to be settled for a lew 
days. Until they are, the 
embargo imposed on Iranian 


oil imports at the beginning of 
August 1987 remains in force. . 

Moreover, the French Gov- 
ernment remains extremely 
guarded about the reasoning 
behind yesterday's cryptic 
announcement, which said 
merely that the Government 
'‘envisages in the next few 
days softening the eri sting 
regime governing Franco-Ira- 
irian oil relations. In a frame- 
work of compensation trade 
deals". 

Formally the embargo 
remains m force, even though 
diplomatic relations were 


restored two months ago, and 
the French Government has 
not explained why it is still 
holding out against the Irani- 
ans on the ofl front, nor why it 
has now derided to ease the 
embargo. 

Diplomatic relations were 
broken off by Paris in August 
1987 in a dispute with Iran over 
alleged terrorist activities in- 
France. They were restored in 
June, after intense negotia- 
tions by the former right-wing 
Government of Mr Jacques 
Chirac, which led to the 
release during this spring's 


French presidential election of 
three French hostages held by 
pro-Iranian terrorist groups in 
the Lebanon. 

The rupture was precipitated 
in July last year by the refusal 
of an Iranian embassy official, 
Mr Wahid Gordii, to answer 
accusations that he had been 
involved in terrorist activities 
in France in 1986. 

Although the French Gov- 
ernment has given no explanar 
tirm of the cautiousness of its 
easing of the oil embargo, two 
factors seem to be at work. 

The first is that a substantial 
financial dispute, over a Slbn 


Iranian loan to the French 
Eurodif uranium enrichment 
project, remains unresolved,' 
and the French Government 
has been reluctant to give 
away any negotiating cards 
prematurely. The second is 
that France may have felt 
obliged to make a gesture of 
goodwill in response to the 
Iran-Iraq ceasefire. 

At all events, it appears that 
Tehran has pressed hard for 
new arrangements to facilitate 
the import of food from France. 

Shell gloomy an oil demand, 
Page 82; Statoil seeks cash 
injection, Page 17 


Poland rejects 
Walesa talks 


By Latte Cofitt in Gdansk 

THE POLISH leadership 
accused this outlawed Solidar- 
ity trade Tmkm jn Gdansk 
its supporters nationwide of 
hniiWng ]t at "strike gunpoint" 
as thousands more workers 
joined the widening labour 
stoppages. 

Solidarity in Gdansk 
responded by appealing to the 
International Red Cross to 
send food , and blankets to 
nearly 2,000 workers who it 
said were now striking in the 
shipyard and the port of 
Gdansk. The authorities 
refused to allow food for the 
strikers to enter the shipyard 
in an a t te mpt to force the men 
to give in qtdckly. 

But young Solidarity activ- 
ists, knapsacks filled with 
bread and sausage, were jump- 
ing the fence su rro un ding toe 
vast shipyard. 

Mr Jerzy Urban, fire govern- 
ment spokesman, said the 
authorities would not negotiate 
with Mr Lech Walesa, the Soli- 
darity leader, to end the 
strikes. Mr Walesa has been 
together with his fellow stzik-% 
ers since they baited work on 
V<m^ h y meaning: 

A curfew from 11pm last 


night to 5am today was 
ordered in the strike-bound 
t ^ymfavng city of Jastrzebie 
Jn southern Poland and in 
other regions where strikes 
were spreading. Solidarity 
sources said four new mines 
wait on strike yesterday, while 
PAP, (he Polish news agency, 
said the Andalusia min e in 
another part of Silesia was 
back working after strikers 
were “ ur g e d" by fellow miners 
to ret ur n to their jobs. 

In the rectory of St Brygkia 
Church in Gdansk advisers to 
Mr Walesa said they were 
determined to see through the 
strike to the end. 

Mr MtchnfV and Mr Tartwime 
Mazowiecki, who advised Soli- 
darity in 1980 and 1981, entered 
the grounds before the 

strike wave began and cannot 
venture outside for fear of 
almost certain arrest. They 
remain in contact through 
teenage couriers with the 
strike leadership under Mr 
Alojzy Szablewski inside the 
shipyard. 

4 Shipyard workers sat on 
'tools playing cards and on the 

gm nnd nhatting as family and 

Continued on Page 14 




As General Wojciech 
Janzzel&ki of Poland, above 
left, faces a wave of strikes 
throughout Poland and 
growing unrest among work- 
ers, Eastern Europe as a 
whole is showing signs of 
restlessness and an unwill- 
ingness to embrace fully the 
reforms of Mr Mikhail Gorb- 
achev, the Soviet leader. 
Despite Moscow's peres- 
troika Romania's President 
Nicolae Ceausescu, above 
right, is still pushing on 
with a Stalinist-ran econ- 
omy. And Mr Todor Zhivkov 
of Bulgaria, left, is di g gin g- 
in and resisting the reforms. 


Moscow’s neighbours grow restless 


hi Vtonfca 


WHEN Mr Mfkhafl Gorbachev 
returns- from his summer holi- 
day. he faces serious chal- 
lenges to his reforms - not 
only from within his owu party 
but from his socialist neigh- 
bours. 

Eastern Europe, so long 
Moscow's Achilles heel, is 
becoming restless for change. 
And the pressure Is coming 
from below. 

hi the space of a month, Pol- 
ish workers have again 
resorted to strikes and are call- 


ing for the legalisation of the 
Solidarity trade union. Tho u- 
sa nds of y oung Czechoslovaks, 
suffocated by 20 years of politi- 
cal and cultural stagnation, 
surprised even toe most scepti- 
cal by marching in Prague last 
Sunday night. In the Old 
Town, they chanted the name 
of Alexander Dubcek, toe party 
leader mercilessly ousted by 
Warsaw Pact tanks on August 
21 1968. 

More and more people in 
neighbouring Hungary are 


openly criticising the destruc- 
tion of villages inhabited by 
ethnic Hungarians in Romania. 
Mr Todor Zhivkov, Bulgaria’s 
leader, h aving sacked Mr Chur 
domir Alexandrov, his refonn- 
wrfwdad deputy in charge of 
economic and party policy, is 
digging in and resisting Gorba- 
chev-style reforms. 

President Nicolae Cewusescn 
of Romania doggedly pashes 
on with a Stalinist-run econ- 
omy. Mr Erich Honecker. East 
Germany's party leader, pon- 


ders what to do with the grow- 
ing influence of the Protestant 
churches but shies away from 
introducing any substa n tial 
political or social c hanges . 

Such a picture must greatly 
disturb the leadership in 
Moscow, not least because the 
recent events taking place in 
Eastern Europe, while not fol- 
lowing any coherent pattern, 
have one thing in common. 

Since the leaderships cannot 
match, or are unwilling to 
Continued on Page* 14 


GM seeks 
to regain 
leadership 
in Europe 

By Kevin Done, Motor 
Industry Correspondent, in . 
London 

GENERAL MOTORS of the US 
unveils today its new range of 
Opel Vectra/Vauxhall Cavalier 
saloons and hatchbacks in an 
attempt to wrest back leader- 
ship from Ford of the hotly 
contested and lucrative mid- 
range segment of the European 
car market 

The new range, developed at 
a cost of about 3800m, will play 
a vital role in sustaining GM*s 
European recovery and is cru- 
cial for its success in the UK,, 
especially in toe all-important 
British fleet market, and in 
West Germany, the biggest 
markets for mid-range cars in 
Western Europe. 

The Opel Vectra/Vauxhall 
Cavalier, which replaces the 
first front-wheel drive Opel 
Ascona/Vauxhall Cavalier 
launched in 1981, is the result 
of a six-year design and devel- 
opment programme at the 
technical development centre 
of Adam Opel, GM's West Ger- 
man subsidiary, which now 
carries out aQ GM’s European 
car development. 

tt will be produced at three 
locations in Western Europe, 
at toe Opel plants at Antwerp 
in Belgium and at Russelsheim 
in West Germany, and at the 
Vauxhall assembly plant at 
.Luton in toe UK, where £30m 
($50m) has been invested in 
new plant and equipment 

As part of the Vectra devel- 
opment prog ramme, gm claims 
to have broken new ground in 
European motor industry 
labour relations with toe intro- 
duction of a four-year labour 
agreement at its Antwerp 
plant, which win dramatically 
increase the competitiveness of 
the Belgian assembly 
operations. 

GM has consolidated its two 
Continued on Page 14 


W German 
trade 
surplus 
shows sharp 
increase 

By David Goodhart in Bonn 

WEST GERMANY'S trade 
surplus rose sharply in June 
lessening the chances of a 
lower trade or current account 
surplus for the year and thus 
potentially renewing pressure 
on the Bonn Govern- 
ment - which is committed to 
reducing the surpluses - to 
further stimulate domestic 
demand. 

The statistics office in Wies- 
baden could think of no special 
factors inducing the unex- 
pected jump in the surplus 
from DM10.3bn (S5.4bn) in May 
to DMl4J2bn in June. 

Exports rose 19 per cent, 
compared with June 1987, and 
imports were up 69 per cent 

The annual trade and cur- 
rent account surpluses of toe 
world’s biggest exporter are 
now unlikely to shift far from 
the 1987 figures of DMllSbn 
and DMSObn respectively. 

Most economists had been 
lo oking for a June figure of 
around DMlObn and one com- 
mented: “It looks as if we did 
not take the buoyant export 
order data seriously enough." 

The weakening of the 
D-Mark against the dollar, 
which gathered pace in mid- 
June, should initially have had 
toe effect of reducing the sur- 
plus. 

The West German authori- 
ties are now in the difficult 
position of not wanting any 
farther weakening in the 
exchange rate but equally not 
wanting to choke off domestic 
demand with another interest 
rate rise. 

Professor Norbert Walter, 
senior economist at Deutsche 
Rank in Frankfurt, said that 
the combination of the real 
depreciation of the D-Mark in 
toe European Monetary Sys- 
tem over several years and the 
recent investment boom in 
Europe lay behind toe jump in 
the surplus. 

He added that the West Ger- 
man Government was in a 
strong position to head off crit- 
icism, especially from toe US, 
having just spent 40 per cent of 
its dollar reserves (DMSSbn) 
trying to hold down the dollar 
rise and with private consump- 
tion continuing to grow at 
per cent a year. 

• The Bonn Government 
has reduced the number of 
undertakings in which it has a 
direct or indirect interest from 
808 to 499 since 1982, bat has 
raised only DM6.6bn from pri- 
vatisation. 

This compared with DM75bn 
in the UK and DM20bn in 
France, according to the Insti- 
tute der Deutschen Wirtschaft 
in Cologne. 


US bond market rallies after 
news of stable price inflation 


By Anthony Harris in Washington 


EXPECTATIONS of higher US 
interest rates weakened yester- 
day after the release of figures 
showing unchanged consumer 
price inflation and a 7 per cent 
tall in durable goods orders, 
r a th e r sh a rper th «" expected. 

As a result; toe bead market 
rallied by mt to half a point 
and the -dollar weakened 
slightly on further concerted 
intervention by the central 


US Coru nmer PH 

Month on month change 
09%, 


Consumer prices rose by 0.4 
cent- in July, precisely in 
with market expectations, 
according to the Bureau of 
Labour Statistics. However, 
there was a slight reduction in 
the rate of inflation apart from 
the volatile food and energy 
sectors. 

This was mainly the result of 
renewed weakness in the doto- 
ing market, where prices have 
now feBen byrl per cent in toe 
pas t th ree month s, afte r an 
attempt to recover profit mar- 
with sharp increases in 


09% 


04% 


0l2% 



Consumer demand for all eggs. 


CONTENTS 


non-durables has been weak 
for several months. 

As a. result of the drought, 
food prices rase by nearly a 
full percentage point. The 
sharpest increases were in 
fruit and vegetables, cereals 
and bakery products and in 


The Call in durable goods 
orders was caused mainly by 
the return of defence orders to 
a more normal level after tix> 
release of a heavy backlog of 
orders in June. The monthly 
total fell by 44 per cent to 
37.8bn. 

Most of the rest of the foil 
was in civilian transport equip- 
ment, with car orders down 
from recent high levels and a 
drop in toe rate of aircraft 
ordering, which is always 
erratic. The aircraft market, 
according to the Department of 
Commerce, remains strong. 

The underlying strength of 
manufacturing demand was 
confirmed with a further L5: 
per cent rise in unfilled orders 
for civilian goods and the sus- 
tained high level of orders for 
non-defence capital equipment, 
which at 335.4bn stands 109 
per cent higher than in July 
1987. 

However, the markets had 
feared some further signs of 
overheated 'demand for manu- 
factures. 



A decision by Kalian 
President Cosslga not 
to taka a holiday in the 
troubled region of Alto 
Adige is seen as 

acknowledgement that 
security cannot be 
guaranteed, following 
16 bombings in bitter 
nationalist conflict 
Page 2 


US pottloet Conservatism rules In Quayie's 

Indiana homeland — — 

Ifnirtli Korea* Seoul looks for fair play from 

builds a 
__10 


the European Community 
Oanwaw bankings Dresdner 
reputation on toe quiet 


Bank 


The curse of specialisa- 
tion: Iran and Iraq prepare to talk — .12 

Wnplnserlnni The relentless drive for size via 

the merger . — 12 

TMnf World rtahti Finding a more ambitious 

way to escape the debt impasse 13 

Lean Markets; Hong Kong; Taylor Woodrow: 
Oil; Pleasurama — — 14 




A ' * ‘ ■ ^ ^ 










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Arw-R*«i«w» - 
World Quids 
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11 


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Sold — 

Intnsfl onsl bone* — ~ 
ms. Caprtal Msrkocs — 


EdtofisJ C o n w B sm . 

EUKXXKfce* _ 


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32 
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-W4fl Street 
-London 


12 Mon ey Msrtcsts . 


Technology . 
unit Trusts . 

Weather 

12 World Index. 


09 

33-36 

27-31 

- 19 

24-27 
_ 14 



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Italian region outraged 
by Cossiga decision 


By John Wytes in Rome 


FRANCESCO COSSIGA. the 
Italian head of state, is this 
week weathering the most seri- 
ous controversy of the three 
years since he was elected 
President. This follows his 
decision to cancel a private 
holiday in the trouble-torn Alto 
Adige. 

The President appears to 
have seriously miscalculated 
the local and national impact 
of a decision prompted by a 
desire to avoid being the trig- 
ger for “irresponsible acts 
which could cause damage to 
people and property.** 

Extreme nationalists, possi- 
bly from both the German- and 
Italian-speaking communities, 
have exploded no fewer than 16 
bombs over the last three 
months in a fresh outbreak of 
terrorist incidents which have 
punctuated the past 30 years. 

While Mr Cossiga’s cancella- 
tion was not motivated by any 
fear for his personal safety, his 
non-appearance in the Alpine 
town of Merano is being seen 
as a reluctant acknowledge- 
ment that the Italian authori- 


ties can no longer guarantee 
law and order in the region. 
The 124.000-strong Italian 


minority, whose disquiet about 
political and linguistic conces- 
sions made to the 280,000 Ger- 
man-speakers has expressed 
itself in votes for the Italian 
Fascist Party, is masking a 
sense of near-betrayal behind 
polite expressions of puzzle- 
ment and disappointment 

Mr Ciriaco De Mita, the 
Prime Minister, has felt bound 
to issue a carefully-worded 
statement which does not call 
into question the President's 
decision but which stresses 
that "the forces of law and 
order are perfectly able to con- 
front and to deal with" isolated 
episodes of destruction. 

The most recent of these last 
week saw the bombing of a 
huge water pipe which could 
almost have had the effect of a 
darn burst over a small village 
in the valley below, but for the 
functioning of a cut-off valve. 

Large sections of the press 
have reluctantly concluded 
that the much respected Preair 


Finns agree moves 
to slow economy 


THE FINNISH Government 
and the main labour and 
employers’ organisations yes- 
terday agreed a wide range of 
measures to stabilise the rap- 
idly overheating economy. The 
package, which includes mod- 
erate wage increases, tax bene- 
fits and an index clause for 
inflation, would increase net 
incomes by 2.5 per cent next 
year. The measures are 
designed to put a clamp on Fin- 
land’s rapidly rising inflation, 
which the Finance Ministry 
expects to jump from a 3.7 per 
cent annual rate last year to 
&5 per cent by the end of this 
year. The target for 1989, pro- 
vided that all the parties stand 
by the agreement, is to keep 
inflat ion below 4 per cent. 
Under yesterday’s pact, unions 
and employers agreed to a 
nominal wage increase of 40 
pennies an hour or FM68 a 
month . 

The Government, mean- 
while, has decided to cut taxes 
by FM3.9bn <£5I4m>. This 
includes a 5.5 per cent adjust- 


ment in Income tax tables and 
a further FML4bn in other tax 
cuts. The agreement also car- 
ries an index linkage clause of 
12 per cent for inflation in Sep- 
tember-December 1988 and 4 
per cent for December 1988 - 
December 1989. 

The compromise was made 
difficult by the negotiations on 
next year’s budget, which is 
expected to grow by 9 per cent 
to FM124bn. The budget will 
include a partial reform of Fin- 
land’s tax structure aiming to 
cut income and corporate taxes 
on one hand and broaden the 
tax base on the other. Labour 
unions have strongly opposed 
a number of cuts in tax bene- 
fits. For example, they won the 
battle over tax-free onion 
membership fees and tax-free 
strike benefits yesterday. 

The agreement, which runs 
until February, carries a 
“strong recommendation” but 
is not binding. Individual 
unions may still bargain for 
higher wage increases and 
other benefits. 


De Cuellar may support 
Bonn’s UN forces role 


By David Goodharf in Bonn 


MR Javier Perez de Cuellar, 
UN Secretary-General, has 
intervened in the debate over 
whether the West German 
army, the Bundeswehr, should 
participate in UN forces by 
expressing indirect support for 
such a move. 

In an interview published 
today in Die Welt, the UN 
Secretary-General says he 
would welcome contributions 
to peace-keeping forces, includ- 
ing troop contingents, from all 
members of the organisation. 

The German constitution is 
ambiguous on tbe issue of 
whether the Bundeswehr can 
be deployed outside the Nato 
area. But the official position 
of the current Government, 
strongly backed by Mr Hans- 
Dietrich Genscber, the Foreign 


Minister, is that such deploy- 
ment remains out of the ques- 
tion. 

This debate, Hke tbe related 
argument over selling arms 
.outside the Nato area, crops up 
regularly in West Germany. It 
has been highlighted in the 
past few days by divisions cm 
the issue within the opposition 
Social Democratic Party. 

Also, Mr Franz Joseph 
Strauss, Prime Minister of Bav- 
aria, recently accused the Gov- 
. eminent of cowardice in refus- 
ing to send the German Navy 
to the Gulf. He said that, 43 
years after the Second World 
War, West Germany should 
behave like a normal member 
of the family of nations and 
must be in a position to fulfil 
international tasks. 


UK-Norway row over oil 
supply vessels may end 


By Karen Fossil in Oslo 


MR Peter Morrison, the UK 
Minister or State for Energy, 
yesterday announced plans to 
end by March 31, 1989 the 
long-standing trade dispute 
between Norway and the UK 
which excluded Norwegian 
supply vessels from operating 
on the UK continental shelf. 

A special initiative enacted 
by the UK Government in 1986 
to support European Commu- 
nity supply vessel fleets pro- 
hibited Norwegian kept from 
the UK Shelf because of Nor- 
way's non-EC status. 


the UK goes back to the 1980s 
when more technologically 
advanced Norwegian vessels 
were used by UK offshore oil 
and gas field operators. 
Because of the wide-range of 
tasks which Norwegian vessels 
could perform, the more dated 
UK fleet soon became excluded 
from its own domain. 


However, the supply vessels' 
dispute between Norway and 


UK operators had also com- 
plained that Norwegian regula- 
tions excluded them from oper- 
ating on the Norwegian 
continental sfonif . Norway sub- 
sequently amended its rules to 
allow UK vessels e ntry . 


dent has committed an error of 
judgment. "The good faith of 
his intentions is obviously 
beyond question but a mistake 
has been made," said La 


Rppubblica yesterday. “The 
first controversial mistake of 
his presidency," commented La 
Stampa. 

Tension in the region has 
apparently been rising since 
agreement in March between 
the Government and the Sud- 
Tiraler Volkspartd, represent- 
ing the German-speaking 
majority, over a package of 
measures guaranteeing the 
equal use of German a fur- 
ther strengthening of local 
political autonomy. 

These were designed to com- 
plete a process guaranteed by 
the Treaty of Paris between the 
victorious wartime allies in 
3046 

The South Tyrol was part of 
the Austrian empire until the 
end of the First World War 
until it was transferred to Italy 
as a reward for entering tbe 
war on the ultimately victori- 
ous side in 3915. 


Greens set 
poll agenda 
in Sweden 


By Sara Webb 

in Stockholm 


WITH THE e m erg e nce of the 
envi ronmen t as one of the Mg 
issues in the Swedish general 
election, politicians of all hues 
took the opportunity to con- 
vince voters of their deep com- 
mitment to curbing pollution, 
in a televised debate last night. 

For the first time, the Green 
Party joined representatives of 
tbe other main parties, includ- 
ing the Energy and Environ- 
ment Minister, Mrs Birgitta 
Dahl, for a political debate on 
traffic pollution and energy 
policy in view of the pro- 
gramme to phase out nuclear 
energy. 

During the last election cam- 
paign in 1985, the Greens were 
excluded from important tele- 
vised discussions, but their 
increase in popularity (during 
the past year, opinion polls 
have regularly shown them 
topping the 4 per cent thresh- 
old required to enter Parlia- 
ment) has ensured them a 
place in the political arena. 

Their rise has forced other 
parties to work hard to appear 
committed to environmental 
protection. 

The ruling Social Democrat 
Party has worked hard on 
shedding its image as the “con- 
crete party" committed to 
industrial development and 
has proposed tighter controls 
on the emission of air and 
water pollutants, as well as 
bringing forward the closure 
programme for Sweden’s 
nuclear reactors. 

Both the Social Democrats 
and the main oppostion parties 
fear that if the Greens enter 
Parliament they will change 
the traditional pattern erf Swed- 
ish politics, by holding tbe bal- 
ance of power between the 
Socialist and non-Sodalist 
blocs. 


• The Governor of Sweden's 
central bank, Mr Bengt Dennis, 
■said yesterday that be would 
join Mr Kjell-Olof Feidt, the 
Finance Minister, in co-chair- 
ing the International Monetary 
Fund/World Bank annual 
meeting in West Berlin 
between September 27-29. 

The decision was taken 
because of growing uncertainty 
over tbe outcome of the Swed- 
ish general election, to be held 
on September 18 only a few 
days before the annual meet- 
ings start. 

The Rikshahk (central bank) 
said that if the ruling Social 
Democrat party were to lose 
the election, Mr Dennis would 
take over as chairman of the 
meetings in place erf Mr Feidt. 

Sweden took on the chair- 
manship of the boards of gov- 
ernors of the IMF and World 
Bank last year. 

“We asked tbe Funds If Mr 
Dennis could co-chair the meet- 
ings and they agreed yester- 
day,” said a senior official at 
the Riksbank, who added that 
the decision was taken to 
“avoid any awkwardness” in 
case the Social Democrats lost 
the election. 


FINANCIAL TIMES WEDNESDAY AUGUST 


24im 


EUROPEAN NEWS 



Hint of economic reform 
for Soviet republics 


By John Lloyd in Moscow 


Cossiga: holiday change. 


Italy sees 
payments 
surplus soar 


By John Wyles 


NEWS THAT Italy’s balance of 
payments reached a record 
monthly surplus in July was 
slightly tarnished yesterday by 
evidence that inflation may 
have risen from around AJ9 per 
cent to an annual rate of above 
5 per cent 

The monthly survey of con- 
sumer prices in major cities 
revealed the impact of the Gov- 
ernment’s raising of the cen- 
tral VAT rate in July from 18 
to 19 per cent together with an 
increase in electricity charges. 
Increases in the local price 
indices ranged from annual 
rates of 4JB per cent in Genoa 
to 52 per cent in Palermo. 

Meanwhile, the L3,581bn 
(£L5bn) surplus on the balance 
of payments in July reflected 
strong inward capital move- 
ments, some undoubtedly 
attracted by comparatively 
high Italian interest rates, and 
others in the form of a $lba 
loan raised by the Treasury. 
Non-bank capital flows regis- 
tered a IAOOOim surplus, while 
Italian portfolio investments 
abroad reached L946bn. Official 
reserves at the end of the 
month stood at L78478bn. 

This year has already seen a 
record monthly deficit in April 
when tbe current account was 
L3,042bn in the zed. Neverthe- 
less, the startlingly good July 
figure leaves the balance of 
payments with an L896bn sur- 
plus after seven months com- 
pared with a deficit of Ll,691bn 
in the same period last year. 

• Soviet officials will arrive 
in Italy today to inspect the 
nuclear missile site at Comiso 
in Sicily, the Foreign Ministry 
said yesterday, Reuter repeats 
from Rome. 

Comiso, where 112 US cruise 
missiles are based, will be the 
last of Nato’s European bases 
to be inspected under the US- 
Soviet Intermediate Nuclear 
Forces treaty. 

The treaty, signed in Decem- 
ber, provides for the scrapping 
of medium-range nuclear mis- 
siles and verification by inspec- 
tors from each side. 


MR VITALY VOROTNIKOV, a 
member of the Soviet polilburo 
and Prime Mtrrfg**r of the Rus- 
sian Federation, has foreshad- 
owed “a completely new level 
of responsibility” for the gov- 
ernments of the Soviet repub- 
lics when the political reforms 
are carried through next year. 

His remarks, carried in the 
newspapers yesterday, came on 
the eve of mass demonstra- 
tions planned for last night in 
the capitals of the Baltic repub- 
lics - Tallinn (Estonia). Riga 
(Latvia) and Vilnius (Lithu- 
ania). 

The demonstrations were 
organised to mark the 49th 
anniversary of the s i gning of 
the Nazi-Soviet pact in 1939 
— which ultimately meant the 
incorporation of the republics 
into the Soviet Union. 

Early reports by Renters 
from Tallinn describe a rally of 
some 2^00 in the city's Hirve 
Park, carrying black, white 
and blue Estonian flags and 
placards with both the Nazi 
swastika awd the Soviet ham- 
mer end sickle crossed out. Mr 
Lagle Parek, a local activist, 
told the crowd: “It is not 
enough to recognise the Soviet 
occupation of 1940; we have to 
restore our independence.” 

Mr Vorotnikov’s remarks, 
coupled with a growing debate 
in tbe press over in c reasing 
regional economic indepen- 
dence, point to a Government 
drive to decentralise power to 
republican and lower levels. 


While this is presented as 
being in line with the philoso- 
phy of perestroika, or eco- 
nomic restructuring; it is 
dearly also designed to chan- 
*nel gro wi n g nationalist feeling 
into an acceptable direction. 

Mr Vorotnikov said that Tor 
the first time for many years 
we are setting up the economic 
basis for local and regional 
self-government* 

In an article In yesterday's 
edition of the newspaper 
Sovietskaya Kultura two Esto- 
nian economists. Mr E. Savi- 
saar and Mr L Haig, called for 
“foil self-financing at republi- 
can level” so that Eston- 
ia - which is already consider- 
ably more efficient than moat 
other Soviet republics - could 
specialise in the production of 
export goods and the acquisi- 
tion of hard currency. 

They said that the control of 
most enterprises by Moscow- 
based ministries had meant a 
distortion of tbe Estonian econ- 
omy over which local bodies 
had no control, and now acted - 
as a brake upon rapid scientific 
nmf technical development. - 

They sharply criticise senior 
managers and officials who 
opposed the required changes, 
saying that it is because they 
would Rise their jobs. 

“Therefore, it is not suxprix- 
ing that the idea of self-financ- 
ing would be rejected by these 
high-paid cferirw for whom the 
armchair in which they sit Is 
regarded as equivalent to effir 


Malta’s opposition takes a 
long hard look at its image 


Godfrey Grima examines a dramatic policy change 


M ALTA’S opposition 
Labour Party has 
emerged from its 
annual delegates congress bris- 
tling with reforming zeaL Still 
smarting from its downfall at 
the May 1987 general elec- 
tioruafter running the country 
for an uninterrupted 16 yean, 
the party has taken a long, 
hard look at itself 
Taking their cues from party 
leader Dr Carmelo Mifsud Bon- 
nici - now confirmed in his 
post by an overwhelming 
secret ballot - delegates boldly 
lanced abscesses long diag- 
nosed, to have brought the 
party into disrepute with vot- 
ers. 

Wayward members, party 
nffir-faig and former ministers ‘ 
— whose claimed misbehaviour 
is said to have given rise to 
widespread corruption - were 
sharply criticised and may yet 
be made to account for their 
mischief. 

Concern was also shown 
with the party's indifference 
towards the unc he c ke d spread 
of political violence. 

The high-handed tactics 
reserved by the police for dis- 
senters, the consistent ransack- 
ing of opposition party clubs 
and the attack on the residence 
of Dr Eddie Fenech. Adami, 
now the island's Prime Minis- 
ter, were all viewed as very 
serious mistakes which cost 
the party large numbers of 
votes. 

Long after the horses have 
bolted. Labour Party delegates 
seem to realise what consider- 
able mileage Fenech Adami’s 
ruling Christian Democrats 
drew from Labour's erring 


way& 

It was this, many delegates 
were convinced, which gave 
the Christian Democrats their 
surplus 4,700 votes and their 
single-seat parliamentary 
majority. 

Hardly anyone questioned 
the Labour party’s policies and 
certainly not the political, eco- 
nomic and sodal frameworks 
- enacted despite widespread 


complaints by the island's 
Roman Catholic CSrarch, lead- 


Roman Catholic Church, lead- 
ing businessmen and other 
prominent sectors of the com- 
munity as one radical reform 
. followed another. . 

With the new gov ernment of 
Fenech Adami taking longer 
than expected to spur the 
island's slnggish economy or to 
narrow deep-seated political 
divisions, the Labour Party is 
convinced its was its tarnished 
popular image, not its uncon- 
ventional tacks, which led the 
party akmg the rood to trouble. 

The point is not lost on. Dr 
Mifsud Bonnici, who says 
much has been learnt from 
past mistakes. 

In the 16 infi^ithu fog party 
has been in opposition, he has 
taken the time to reshuffle the 
cards in the Labour Party pads 
and young professionals, all 
kindred spirits, have been 
voted into a good number of 
ton partv posts. 

Also, statutory measures 
have been taken to clip the 
wings of undisciplined mem- 
bers, and former min- 


to the party for his behaviour," 
Dr Mifsud Bonnici add s. 
Whether these measures alone 
will help the party’s image 

The confrontational, divisive 
and autocratic governing style 
of former premier Mr Dorn 
Mintoff, the distrust of the 
judiciary, together with a 
series of proven constitutional 
breaches, all counted against 
the party an election day. 

In this way, the Labour Gov- 
ernment's successful creation 
of new wealth and the provi- 
sion of social benefits were 

pWkmirfpH 

Dr Mifsud Bonnici hopes 
that by bringing forward a 
more respectable class of 
labour politician and mantaln- 
ing a tight grip on patty disci- 
pline, his party will be looked 
upon more favourably when 
the island votes again in 3992. 


Anyone occupying party 
posts will now have to be con- 
firmed by delegates every two 
years, including’ ministers 


Cypriot leaders seek good atmosphere 


By Andrew Gowers in Geneva 


THE Greek and Turkish 
Cypriot leaders sought yester- 
I day to create a good atmos- 
phere for today’s resumption of 
Cyprus peace talks by paying 
each other compliments and 
stressing their desire to see the 
negotiations succeed. 

Mr George Vassiliou, the 
Cyprus President, and Mr Rauf 
Denktash, leader of the break- 
away state established in Turk- 
ish northern Cyprus in 1983, 
met separately in Geneva with 
Mr Javier Perez de Cuellar, the 
UN Secretary-General, who is 
to host a working lunch for 
them today. 

This will be their first meet- 
ing, and will mark the formal 
relaunch of UN-led efforts to 
resolve the conflict over the 


island after a three-year break. 
Further encounters between 
the two men are also expected 
this week ahead of the 
full-scale negotiations which 
are due to start in Nicosia in 
September. 

In their remarks to reporters 
yesterday, both Mr Vassiliou 
and Mr Denktash were anxious 
to give the impression that 
they aim to stmt their tafog 
with a clean slate. 

Today’s statement will steer 
clear of potentially trouble- 
some details, making only an 
obligatory reference to the 
high-level agreements of 1977 
and 1979 which set the frame- 
work for a bizonal federal 
republic. 

The. meetings between the 


two leaders are designed essen- 
tially to create a personal rap- 
port for negotiations in which 
ffiey are expected to be directly 


involved throughout. 

To this end, Mr Vassiliou 
paid Mr Denktash a series of 
compliments in a rare inter- 
view with Turkish television,- 
and Mr Denktash contrasted 
Mr Vassiliou with bis predeces- 
'sor. Mr Spyros Kyprianou, who 
was ousted as Cyprus presi- 
dent in last February’s elec- 
tions, and. with whom Mr 
Denktash did not get on. 

“We’re deal in g with a whole 
new equation,” said Mr Denk- 
tash. “Kyp anou was a brick . 
wall, arid I understand that 
VassHkm is not a walL” 

However, the differences 


Commission proposals on company tax would change depreciation rules 

Bu UlafcuM ^ . . 


By Richard Waters 


THE TAX bills of all 
companies operating in the 
European Community will be 
altered significantly if draft 
proposals for a directive pro- 
duced by tbe European Com- 
mission are adopted.. 

The proposals, which outline 
how a company's profits 
should be calculated for tax 
purposes, would standardise 
the markedly different systems 
in operation across Europe. 

In an introduction to its pro- 
posals, the Commission says 
the changes are part of a plan 
to remove the distortions to 
investment decisions and com- 
petition between companies 
created by different tax 


regimes. 

Harmonising the tax base in 
different states is only one step 
towards these objectives, 
though. The second stage will 
be the for more rfiffimit task of 
reducing the differences 
between corporation tax rates. 
A similar attempt to bring 
value added tax rates into line 
bas already caused political 
upheaval in the Community. 

The most far reaching of the 
corporation tax proposals con- 
cerns the way in winch compa- 
nies set depreciation against 
their profits, in line with 
accounting rules in the fourth 
company law directive, assets 
which decline in value would 


have to be written down over 

their useful lives. The dapreda- 
tion each year would then be 
set against taxable profits. 

Companies would be forced 
to apply the same depreciation 
rates for tax purposes that 
they use in their published 
accounts, ending a division 
which exists in several mem- 
ber states, including Britain, 
the Netherlands and Ireland. 

These rules would outlaw 
the use of accelerated depreda- 
tion rates to provide a tax 
incentive to new investment. 
Such inducements were phased 
out in [the UK after 1984 but are 
still in use elsewhere, most 
notably in Ireland. 


A further important innova- 
tion for several countries 
would be the ability to write 
down goodwill for tax pur- 1 
poses. This is currently permit- 
ted to varying degrees in West 
Germany, France and Belgium. 
The ability to niwim tax relief 
on goodwill would have a sig- 
nificant affect on acquisitive 
companies in service industries 
which pay substantial premi- 
ums to acquire brand names- 
and other intangible assets. 

The UK drinks and hotels 
group Grand Metropolitan, for 
instance, has recently 
•announced its intention to 
show £500m of acquired brands 
in its bal au*** sheet. Under 


Commission’s proposals, it 
would be able to unite these off 
against tax over five years - a 
reduction in its taxable profits 
of £l0Qm a year. 

Such a radical development 
is likely to provide consider- 
able impetus to the movement 
to allow companies to show 
int ang ibl e assets In their bal- 
ance sheets. They would be 
forced, though, to write these 
off against reported profits - a 
move winch accountants claim 
would distort the companies’ 
true profits. 

Technical changes in the 
method of calculating deprecia- 
tion would also have a marke d 
affect on some companies. 


depending on their current 
national rules. For instance, 
the Introduction of a choice of 
depreciation methods will ben- 
efit French companies, since 
they will effectively be able to 
write down buildings faster 
than under current rules. 

Other significant themes 
tackled include how companies 
should calculate capital gains 
or losses; how they value 
stock; and the extent to which 
expenses and provisions can be 
set against tax. 

The Commission's proposals 
are Hkely to take several years 
to implement. Earlier draft 
directives for harmonising cor- 
poration tax have been pend- 


ing for more thaw 10 years. 

According to Mr John Gold- 
sworth, a tax consultant with 
Coopers & Lybrand in London, 
the requirement for unanimity 
among member states over tax 
proposals, compared with the 
simple majority needed iq 
other areas, means that the lat- 
est proposals are unlikely to 
see tbe light of day for some 
while — by which time market 
forces may already have forced 
roe various national corpora- 
tion tax systems and rates 
more into line. 

The document has not yet 
been published, but has had a 
limited circulation among 
interested parties. 


Hint of new 
economic - 
freedom for 


ctency," they write. _ I 

However. Dr B. Shtulberg. j 
another economist writing m 
the same newspaper, points 
out that tell rational auton- 
omy will contradict, at least in 
some respects^ the drive to 
locate tbeseat of as many pro- 
duction decisions as possible in 
the enterprise,- replacing the 
“dictatorship of the ministries i 
with the dictatorship of the i 
republics." 

He says that a full Mown 

model of economic Indepen- 
dence would cause uneven 
development among republics, 
as some - presumably like 
Estonia - would surge ahead 
in living standards, white oth- 
ers fell further behind. 

Mr Raig and Mr Savisaar 
also admit that this would hap- 1 
pen, although for them It posed ; 
no problems. i 


Soviet 

republics 


By John Lloyd In MoecOw 


MR VITALY VOROTNKOV’-* 
Russian Federation. h» fort- 




• THE SOVIET authorities; 
have Jafted the otgaulsers of 
last Sunday’s public protest in 
Moscow to tnntk the 20th anni- 
versary of tiut crushing of tbe 
Prague Spring, writes John 
Lloyd. They have been jailed 
for up to 15 days white fines of 
UP to 100 roubles (*158) have 
been imposed on a farther 15 
activists belonging to the Dem- 
ocratic Union group. 

Official spokesmen have 
made no comment on allega- 
tions earlier this week that 
those arrested were beaten in 
the police stations. 


between them on issues of sub- 
stance appeared to remain as 
'great as ever. Mr Vassiliou 
emphasised the paramount 
need for agreement on the 
withdrawal of Turkish troops 
from Cyprus, as demanded by 
the UN, and for guarantees of 
freedom of movement through- 
out the ialgu d 

Mr Denktash replied that 
there was no question of a 
withdrawal of Turkish troops 
before the internationally-re- 
cognised Cyprus Government 
was dissolved. 

Today's statement will set a 
deadline of June 1989 for con- 
elusion of the negotiations, a 
date endorsed with differing 
degrees of enthusiasm by the 
two leaders. 


level of responsibility* forth® 
governments of thejww* 
republics when ths pctfjkg 

reforms are carried through 

a ^s y rSaaxk^canted to 1 
newspapers yeeteijay^cjme 
on the eve of mass demwgre* 
tions planned for last night to 
the capitals of the Boltin 
Tepohlies - Minn (Estonia). 
JEUgo (Latvia) and Vilnius 

( Lith uania). 

The demonstrations were 

organised to mark the 4«h 
anniversary of the slgnfog of 
the Nazi-Soviet pact In IMS » - 

which ultimately meant the 

incorporation of the repohuc* 
bits the Soviet Union. 

Early reports by Reuters 
from Tallinn describe a x*Uy 
of some 2.000 in the dty * 
Hirve Park, carrying black, 
white and blue Estonian flag* 
and placards with both the 
Nazi swastika and the Soviet 
hammer and sickle crossed 
out Mr Lagle Panfk, a foral 
activist, told the crowd that “It 
is not enough to recognise (he 
Soviet occupation of lMfcw* 
have to restore our Indepen- 


dence.” __ 

Mr Vorotnikov's remarks, 
coopted with a growing debate 
In the press over Increasing 
regional economic Indepon* 
deuce, point to a government 


drive to decentralise power to 
mmhUcan and lower levels. 


whenever the party is in gov- 
ernment 

In addition, a committee of 
vigilantes has been set up to 
discipline anyone stepping out 
erf line. 

The idea Is to ensure that 
misbehaviour by Ugh ranking 
party officials, which created 
the impression Labour was 
ruining a disorderly house 
while in gov ernmen t, will be 
promptly and harshly dealt 
with. 

Punishment, explains Dr 
Mifsud Bonnici may include 
the party withdrawing Its 
ticket from sitting MPs or 
throwing not those whose 
transgressions, show the party, 
in a bad light 

“No-one wants to start any 
witch hunts, but in future 
ev e ryone win have to account . 


republican and lower levels. 

While this is presented as 
luting in line with the philoso- 
phy of perestroika, or eco- 
nomic restructuring, it 
isdearly also designed to 
channel growing nationalist 
feeling into an acceptable 
direction. 

Mr Vorotnikov said that Tor 
the first time for many years 
we are setting op the economic 
basis for local and regional 
self-government.” 

In an article in yesterday's 
edition of the newspaper 
Sovietskaya Kultura two Esto- 
nian economists, Mr B. Savi- 
saar and Mr L Raig. called for 
“fall self-financing at republi- 
can level** so that Estonia - 
which is already considerably 
more efficient than most other 
Soviet republics — -could speci- 
alise In the production of 
export goods and the acqntek 
firm of hard currency. 

They said that the control of 
most enterprises by Moscow- 
based ministries had meant a 
distortion of the Estonian 
economy over which local bod- 
ies had no control, and now 
acted as a brake upon rapid 
scientific and technical devel- 
opment. 

They shandy criticise senior 
managers and officials who 
opposed the required changes, 
saying that it is because they 
would lose their Jobs. 

“Therefore, it Is not surpris- 
ing that the idea of self-financ- 
ing would be rejected by these 
high-paid clerks for whom the 
armchair in which they sit is 
regarded as equivalent to effi- 
dency," they write. 

However, Dr B. Shtulberg, 
another economist writing in 
the same newspaper, points 
out that full regional auton- 
omy will contradict, at least in 
some respects, the drive to 
locate the seat of as many pro- 
duction decisions as possible 
in the enterprise, replacing the 
“dictatorship of the ministries 
with the dictatorship of the 
republics.” 

He says that a full blown 
model of economic indepen- 
dence would cause uneven 
development among republics, 
as some — presumably like 
Estonia — would surge ahead 
in living standards, white oth- 
ers fell further behind. 

Mr Raig and Mr Savisaar 
also admit that this would 
happen, though for them it 
posed no problems. 


• THE SOVIET authorities 
have jailed the organisers of 
last Sunday’s public protest In 
Moscow to mark the 20th anni- 
versary of the crushing of the 
nno Spring, writes John 
Lloyd. They have been jailed 
for up to is days while fines of 
up to Roubles 100 (£93) have 
been ImpOMd on a farther IS 
activists to the Dem- 

ocratic Union group. 

Official spokesmen have 
mo d e no comment on allega- 
tions earlier this week that 
those arrested were beaten in 
the police stations. 


financial Times 


XwS?} .i’ 1 ' t Uw J Fiwioc i al Ita*’ 

(Europe) U4,, Frankfort Branch, repro- 
** E-Hugo. Frankfort, 'Main. 

S2*_ , V. todo*. R.A.F. MeClMn, 
G.TA Owner. M.C. Qonnn, D.E.P. 
Palmer, London. Printer: Frankfurter 
Fraak- 

■pti/®**™' Rcaponaibln editor: G.D. 
Owen, Financial Tima. Bracket! Hook. 
i Street JU»*» BO 4BY. *» 

The Fmandal time* Lid, 1S8S. 


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Seoul to 
cut trade 


surplus by 
buying gold 


SOUTH KOREA plans to 
increase gold imports year 
to help curb its growing cur- 
rent account surplus ease 
trade frictions with its 
trading partners, Economic 
Planning Board officials said. 
Reuter writes from Seoul. 


"Imports of gold would help 
account 


to reduce our current 
surplus and control the money 
supply," one official said. He 
said the volume of imports had 
not been worked out. 


S Korean car 
exports down 

South Korea’s three, main car 
manufacturers reported they 
exported 52,672 motor vehicles, 
mostly passenger cars, in July, 
a decrease of 4.4 per cent from 
55,324 . vehicles . in the same 
month last year, according to 
AP-DJ in SeouL 
The aggregate of exports 
between January and July also 
declined 5.7 per cent to 299,686 
vehicles from - the year-ago 
period’s 317,970 vehicles, 
according to the reports.. The 
setback was attributed to 
strikes which battered the 
South Korean car industry in 
months up to June. 


Japan’s economy 
resumes growth 

Japan’s economy is expanding 
steadily alter a temporary halt 
in April and May, a senior offi- 
cial of the. Economic Planning 
Agency said, Reuter reports 
from Tokyo. The official, 
explaining, the- agency’s 
monthly economic report, said 
the economy, showed almost nil 
growth in April and May. 

The economy's growth now 
is supported hugely by strong 
individual consumption, 
increased capital spending and 
improved corporate earnings, 
the monthly repeat said. 


Sudan' to censor 
relief reports 

Sudan has imposed censorship 
on foreign journalists after 
criticism abroad of government 
handling of flood relief aid, 
Reuter reports from Khar- 
toum- Mr Abdullah 
Mohammed Ahmed, the Infor- 
mation Minister, announced on 
Monday night that all reports, 
photographs and video tapes 
must be submitted to-Mtatetiy 
of Information officials for 
approval before, being des- 
patched overseas. 

Hotels were ordered not to 
allow the scores of visiting for- 
eign journalists to transmit 
news items by telex unless the 
stories were stamped approved 
by the ministry of information. 


Taiwan growth rate 

Taiwan’s economy grew at a 
rate of 6.7 per cent during the 
second quarter of .1988 com- 
pared with the same period a 
year earlier according to the 
Directorate General of Budget, 
Accounting & Sta t istics. AP-DJ 
reports from Taipei. The 
agency said the nation's real 
gross national product for the 
second quarter was NTS752J6bn 
(£15.SbnX an increase from NT* 
705. 6bn a year earlier and from 
NT$731bn during the first 
quarter of 1968. 


NZ to end subsidies 

The New Zealand Government 
is to phase out shipbuilding 
industry subsidies and end 
import licensing for commer- 
cial vessels, Mr David Cayglll. 
the Trade and Industry Minis- 
ter said, AP-DJ writes from 
Wellington. 


BUDGET SURPLUS PUT AT RECORD AS5.47BN 


Keating optimistic about 
balance of payments 


By Chris Sherweil In Sydney 


THE Australian budget 
delivered last night by Mr Paul 
Keating, the Federal Treasurer, 
was. his most optimistic yet, 
reflecting official belief that 
the country is close, to conquer- 
ing its chronic bafainw* of pay- 
ments and external debt prob- 
lems. 

“The nation is successfully 
emerging from Its most severe 
economic crisis in a genera- 
tion,” he said in a televised 
speech to parliament promis- 
ing a record budget surplus of 
A$5.47bn (£2.65bn). 

But be added that the overall 
strategy remained one of 
restraint, and said pointedly 
that the Government, "stm 
wanted to eradicate inflation. 
“Australia’s number one eco- 
nomic disease”. 

Mr Keating’s statement, his 
tenth since the Labor Party 
came to power in 1983, was in 
line with market expectations 
after being billed by the Gov- 
ernment as its “best yet”. 

But as the Treasurer himself 
acknowledged. International 
developments - strong world 
economic growth' since last 
October’s sharemarket crash 
and a- surge in commodity 
prices - “have been much kin- 
der to ns recently”. 

For the hard-pressed Austra- 
lian income tax payer, who has 
watched the Government’s cof- 
fers swell through fiscal drag 


while experiencing five years 
of wage restraint, Mr Kea ting 
promised tax cuts from July 
next year. 

That is well-timed for the 
next election, due in 1990, hut 
they will only be given as a 
tradeoff with pay increases to 
be negotiated with the union 
movement For upper income 
groups, they may also be 
phased in, while low and mid- 
dle income groups can expect 
the cuts in one fell swoop. 

The opposition Liberal Party 
and business groups last night 
criticised the budget for not 
delivering tax cuts sooner, and 
for continuing a slow adjust- 
ment to continuing external 
problems. 

The budget's highlights 
include: 

• Continued restraint In fed- 
eral government spending, 
with a real 19 per cent cut to 
A$82bn, coupled with buoyant 
tax and .other revenues of 
A*87.5bn, wOl give a record 
A$x5bn budget surplus for the 
year to June 1989, equivalent 
to 1.7 per cent of gross domes- 
tic product. 

The figure compares with an 
actual A$2.04bn revised sur- 
plus In 1987-88,- a figure origi- 
nally projected by Mr Keating 
one year ago at a A*27m defi- 
cit. 

• A reduction in the net bar- 
rowing requirement of federal 


and state governments and 
public enterprises to zero. This 
will allow the net redemption 
of A$3bn in domestic bonds 
and net retirement of AS3bn in 
foreign debt 

• Another 9 per cent forecast 
improvement in the terms of 
trade, to give a prospective 
current account deficit for 
1988-89 Of AS9.5bn. At 3 per 
cent of GDP, this would be half 
the level of three years ago. 

• A near-stabilisation of the 
country's net external debt as 
a proportion of GDP at the 
high level of 309 per cent To 
reduce the bur den, the govern- 
ment acknowledges that a fur- 
ther fall in the current account 
deficit is needed. 

• Real growth in GDP of 3.5 
per cent, after 39 per cent in 
1987-88, but with no contribu- 
tion from net exports as 
domestic demand continues at 
a strong pace. This is expected 
to bring a further decline in 
the rate of unemployment to 
an average 7.25 per cent from 
7.8 per coat, and an increase of 
2.75 per cent in employment. 

• A projected 12 per cent 
increase in business invest- 
ment, while private sector con- 
sumption holds steady at 2.75 
per cent growth. 

• A reduction in the Inflation 
rate to 45 per cent by June 
1989 from the present 7J. per 
cent leveL This will be helped 



Paul Keating making bis budget speech in Parliament yesterday 


by a 0.5 point contribution 
from newly-announced indirect 
tax changes, including an 
A$400m cut in beer tax, the 
most welcomed revenue mea- 
sure. 

• Asset sales of A5700m, 
lower than the 1987-88 proceeds 
of A$1.06bn. The bulk will 
come from the sale of surplus 
defence land and buildings, 
and from a skyscraper in Syd- 
ney’s central business district. 

• A series of social welfare 
measures targeted at those 
most in need, including an 
increase in payments under a 
new family income support 
scheme and two progr a mmes 
to help disadvantaged people 
re-enter the workforce. The 
Government also confirmed 
new .tertiary education fees, to 
be paid as a tax. 


Mr Keating also announced 

the removal of two rem aining 

elements of unwarranted regu- 
lation in banking: the abolition 
of the distinction between trad- 
ing and savings banks, and an 
easing of the requirement that 
banks place deposits with the 
central bank. 

The measures, he said, 
would enhance the efficiency 
of the banks and exert down- 
ward pressure on interest 
rates. 

His speech was peppered 
with back-slapping superla- 
tives describing the Govern- 
ment's achievements. He said 
that Australia’s rate of job 
growth was nnmafcheri in the 
Western world, and that no 
leading OECD country had 
reduced the size of its govern- 
ment sector, on such a vast 


scale. 

Inflation was “locked well 
into single digits” for the first 
time in 20 years, and under his 
wages-tax plan could be 
reduced to 3 or 4 per cent by 
1990. This, he said, would “put 
us back with the rest of the 
world, an achievement which 
has eluded us for a genera- 
tion". 

But a challenge remained. 
“And that," he declared, “is to 
prove that we can turn the 
opportunities of better times 
into solid foundations for long- 
lasting prosperity. . . 

“If we are to avoid the mis- 
takes of the past, we must 
abandon forever the myopic 
view that the world owes us a 
living and will go on bankroll- 
ing us whatever we do." 

Bank rules. Page 22 


Iran claims Iraq is preparing to attack 


By Andrew Gowers in Geneva 


A - FURTHER ' cloud was 
yesterday cast over tomor- 
row’s Geneva talks between 
Iran and Iraq when Mr All 
Akbar Velayati, the Iranian 

Surri gn lUnhtor , dirimri that 
Baghdad was violating the 
Gulf ceasefire by massing its 
troops in preparation for a 
fresh attack on Iranian forces 
on the central war front. 

The Islamic Republic News 
Agency reported that Mr 
Velayati had complained to Mr 
Javier Perez de Cuellar, the 
United Nations Secretary- 
General, who will preside over 
tomorrow’s meeting, that an 
Iraqi armoured brigade had 


advanced between 1 and 4 km 
towards Iranian positions west 
of tiie Do-Vfrai river, and that 
Iraq’s 4th army corps com- 
mander had threatened to 
attack the Iranians unless 
they withdrew to the east 
hank of the river. 

The Iraqis confirmed that 
they bad threatened to use 
force to push the Iranians 
hade. 

There was no immediate 

em ifiim iti mi frnrn UN nffiriak 

in Geneva that the complaint 
had been received. But in 
Baghdad, a spokesman with 
the UN's military observer 
group monitoring the ceasefire 


seemed to rebut the Iranian 
claim, saying the war front 
was calm yesterday. 

Iraq, for its part, accused 
the Iranians of reinforcing 
their positions across the front 
from Its 4th army corps near 
the southern town of Misan. 
The Iraqi news agency said 
Iraq told UN military observ- 
ers: “If the Iranian troops are 
not withdrawn to their origi- 
nal positions, our forces will 
push them back by force.” 

Both sides have made a 
number of charges of ceasefire 
violations since the truce took 
effect last Saturday, but none 
of the allegations has been 


verified, and "UN officials 
believe the ceasefire is still 
holding despite obvious brink- 
manship by the two sides. 
None the less, the persistent 
recriminations can only com- 
plicate the task of Mr Velayati 
and Mr Tariq Aziz, the Iraqi 
Foreign Minister, when they 
tit down together for the first 
time. 


If their talks on a compre- 
hensive settlement of the war 
make heavy weather as expec- 
ted, genuine breaches of the 
ceasefire - If not a complete 
breakdown — can be expected, 
to result 


Israel-PLO clash over farm marketing 


By Andrew WhWey in Jerusalem 


THIS TIME last year the Israeli 
Government was busy encour- 
aging middteclass Palestinians 
living in. the West Bank and 
Gaza Strip to set up economic 
associations dedicated to pro- 
moting local output 

They were improving the 
"quality of life" - a slogan bor- 
rowed from Mr George Shultz, 
the US Secretary of State - it 
was said, and thus helping pre-' 
serve social order. . 

Twelve months later, the 
Palestinian intifada has stood 
that logic on its head. At a 
stroke, Jordan’s precipitate 
withdrawal from the occupied 
■ territories has decapita te d the 
Chambers of Commerce, mar-' 
keting co-operatives and pro- 
fessional associations in . the 
West Bank which had always 
looked to Amman for support.- 

Headless, they have fallen 
prey to a contest for control 
starting between Israel and thef 
FLO. Two planning meetings 
of Palestinian businessmen 
and formers arranged for late 
last week in East Jerusalem 
were broken up by police 
before they could begin. 

P romine nt Palestinian econ- 
omists and development 
experts were warned .by the 
authorities not to get involved. 
Their aim is the establishment 
of new producers’ associati o ns 
for dairy products and for fruit 


The underground leadership oi 
the uprising in tee Israeli-oc- 
cupied territories has called on 
Palestinians to create new 
“popular committees” in every 
town and village. This follows 
Thursday’s banning of the 
local associations by Mr Ylt-i 
zhak Babin, the Defence Minis- 
ter, and the subsequent arrest 
of accused committee members 
in the Gaza Strip. “All iff our 
people are popular commit- 
tees. They are our lungs and 
we will never give them up,” 
declared the uprising’s leaders 


yesterday, through the latest 
clandestine leaflet being dis- 
tributed in East Jerusalem and 
the West Bank- 
Half a dozen refugee camps 
in the West Bank and Gaza 
Strip, as well as the important 
city of Nablus, were undo: foil 
curfew yesterday, following a 
fresh wave of unrest on Mon- 
day in which 17 people were 
injured. One man was reported, 
to have died in the Jabalaya 
camp in Gaza, but there was 
no confirmation of bis death 
from the army. 


and vegetables — the staple 
agricultural export items from 
the West Bank - independent 
of the oM, pro-Jordanian bod- 
ies. 

Ideological blessing for this 
move has been given by the 
underground leadership of the 
uprising; A clandestine leaflet 
10 days ago specifically called 
on Palestinian formers to mar- 
ket their goods exclusively 


with the Jericho-based Associa- 
tion of Agricultural Marketing 
Boards. 


through the now banned “pop- 
up in 


ular committees" set up 
each locality. A so-called 
Supreme Marketing Council, 
embracing formers and grow- 
ers in bote the West Bank and 
Gaza Strip, is being planned, 
for instance, in competition 


Headed by Mr Taksfan Fads, 
the latter - Israel’s main nego- - 
Hating partner among Palestin- 
ian formers on such conten- 
tious issues as exports to the 
European Community - is 
itself not even a year old. 
Another embryonic- body, in 
which tee Community-financed 
Economic Development Group 
run by Mr Ibrahim Malar is 
involved, is attempting to 
organise Palestinian meat and 
milk producers. 

The Civil Administration for 
the occupied territories and the 


Agriculture Ministry in Tel 
Aviv are making quite clear 
that they will have no truck 
with three new bodies, even if 
tee restrictions they impose 
over the coming weeks create 
additional, unwanted problems 
with the European Commis- 
sion. 

At a meeting on Sunday, Mr 
Shmuel Goren, the Civil 
Administration’s head, and 
Agriculture Minister Arie 
NehamHn are reported to have 
decided to penalise farmers 
who refuse to market their pro- 
duce through the old network. 
“We will not allow hostile bod- 
ies to export in place of the 
normal channels,” confirmed 
tee Civil Administration yes- 
terday. 

In practice, security officials 
say this means that any former 
or agricultural exporter 
accused of association with the 
“popular committees" will be 
denied an export licence. Nor 
■will the Agriculture Ministry 
recognise certificates of origin 
issued by bodies they believe 
are PLO-oriented. 

Compounding Palestinian 
farmers’ headaches as they 
attempt to harvest and market 
their summer fruit are the 
summary bans Imposed by tee 
army on the sale of produce by 
individual villages, in punish- 
ment for protest disturbances. 


Japan has modest hopes for Peking visit 


A FIVE-DAY official visit by a 
Japanese Prime Minister to 
rihiwa should Tank among the 
more important events on the 
world diplomatic scene. 

The two 'countries have 
immense potential influence in 
the world in general and espe- 
cially in tfaexr region where 
political currents are begin- 
ning to fore again after several 
years of stagnation. Their bilat- 
eral relationship too is develop- 
ing rapidly, as China becomes 
more open and the Japanese 
become more eager to mend 
the wounds of the past and 


Ian Rodger considers 
the issues likely to be 
covered in Takeshita’s 
talks in China 


help thetr neighbours. 
However, tin 


lb visit of Mr 


Noboru Takeshita, the 
nese Prime Minister to P 
which begins tomorrow, 
unlikely to produce any star- 
tling results or initiatives. He 
will confirm his country’s com- 
mitment to helping China’s 
ambitious modernisation pro- 
gramme, offering * YSOObn 
(£9L6bn) In loans in the 1990-95 
period. Japan, provides about 
70 per cent of all China’s bilal- 


SHANG R i - LA I NT E RN ATI ON A IT 



IN SINGAPORE 

WHERE ELSE BUT THE SHANGRI-LA 
; One of die .■wodd’S best hotels. 

gSbongritobotel ^ 


SHAM 0 U 4 A 




• GOlUNrffMKM 


eral fitumria 1 ! fa a si writer 

vein, the two countries will 
sign an agreement providing 
Japanese industrial investors 

in China with tea normal legal 
protections. 

The Japanese Prime Minis- 
ter, widely criticised for doing 
virtually nothing on bis official 
visit to Britain last spring, will 
then embark on an ambitious 
two-day. trip across China, 
spending one day. visiting the 
femous Buddhist caves at Dun 
Huang mi the Silk Road and 
then flying to *ha anra*>n> capi- 
tal city Of Tf«n 

The visit is ostensibly an 
occasion to celebrate the tenth 
anniversary, of the treaty of 
peace and: friendship signed 
between the two in 1978, and 
the Japanese are relieved that, 
for owe; bilateral relations are 
relatively frefcjof tension. 

Stno-Japaneae relations have 
been troubled ever since the 
two agreed' to- recognise each • 
other to 1972. The problems are 
in three. areas -.attitudes to 
the Second World War, refer 
tionswite Taiwan and trade. 

" The trade fssue blew up to 
1985 when- the •' Japanese 
exploited to the foil -China’s 
market opening and scored a 
trade surplus of more than 
83m. The Ojinewiwponded 
by- slapping heavy tariffs on 
Japanese goods and demanding 
reciprocity. The Japanese 
retreated* and- In recent . 


months. China, now Japan’s 
fifth largest trading partner 
(Japan is China’s second larg- 
est partner after Hong Kong} 
have been enjoying small sur- 
pluses with its eastern neigh- 
bour. 

P ricing hag long scrutinised 
Japan’s relations with Taiwan. 

In tee past couple of years, 
the main sore point has been a 
dormitory for Chinese students 
in Kyoto bought by the Taiwan 
Government in 1952. Peking 
claims that it should belong to 
China, and has not accepted 
Japanese court decisions 
* g»hi«efc its eteim Japanese offi- 
cials say tea* China hag not 
raised the issue for some time, 
so they expect it may come up 
only briefly during the visit. 

As for China's frequent com- 
plaints about Japan's insensi- 
tivity to its neighbours’ feel- 
ings about the Second World 
War, Mr Takeshita will repeat 
a commitment that bis country 
will never again become a mili- 


tary power. He may also point 
' did not 


out that he himself 
visit the Tokyo’s Yasnkuni 
shrine this year, a memorial 
where many war criminals are 
buried. China was angry when 
former Prime Minister Yasu- 
hiro Nakasone visited the 
shrine two yeare ago. 

The visit will begin with a 
day a half Of rfjsflnfigirvng 
between leaders of the two 
countries in Peking at which 


tee Japanese hope to concen- 
trate on international and 
regional issues. “We do not 
know what China will raise on 
tee bilateral side, but relations 
have been in good shape in tee 
past six months, so we do not 
expect anything serious,” an 
nffiriat said this week. 

Japan’s main interest is 
advancing the peace process is 
Kampuchea. The Japanese are 
working hard on the issue, see- 
ing it as a test case erf their 
diplomatic influence in South 
East Asia. However, foreign 
ministry officials said Mr Tak- 
eshita would not criticise the 
Chinese for their support of the 
Khmer Rouge. 

The Japanese will also 
explore China's views and 
interests in developments in 
the Korean peninsula. With the 
.democratisation of South 
Korea and tee approach of the 
Olympic Games, talk of more 
fundamental diang w; in rela- 
tionships in the area are in tee 
air. 

The Japanese would like 
China to recognise South 
Korea, and the Chinese would 
like Japan to recognise Norte 
Korea. In the past few weeks, 
the Japanese have indicated 
that they would respond flexi- 
bly to North Korean overtures 
to reestablish contacts broken 
following the downing of a 
South Korean airliner last 
year. 


Angola timetable gap 
set to dominate talks 


By Michael Holman, Africa Editor 


THE spectacle of Gen Jannie 
Geldenhuvs. South Africa’s 
army nhfef in cordial and ani- 
mated conversation with 
Cuban officials around a res- 
taurant table in Geneva earlier 
this month, convinced even the 
most sceptical observers that 
the talks on south-western 
Africa were making progress. 

The unusual display of 
camaraderie in fact presaged 
the outcome of the Geneva 
talks. They produced an agree- 
ment among Angola, Cuba and 
South Africa on a ceasefire in 
Angola, and a September 1 tar- 
get for the withdrawal of South 
African forces. 

But when tee talks resume 
In the Congolese capital of 
Brazzaville today, the amicable 
relationship between Gen Gel- 
denhuys and his Cuban coun- 
terparts will be severely tested. 

Delegates from Angola, 
Cuba, and South Africa, under 
the chairmanship of Dr Ches- 
ter Crocker, the US Assistant 
Secretary of State for Africa, 
are expected to confront tee 
single most important obstacle 
to a regional pact: the wide gap 


between the governments in 
Luanda and Pretoria over the 
timetable for the withdrawal of 
some 45,000 Cuban troops in 
Angola. 

South Africa, backed by the 
US, has insisted that imple- 
mentation of a UN plan for 
internationally supervised elec- 
tions in Namibia is conditional , 
on a Cuban pull-out That must 
take place by June next year, 
says Pretoria, matching a sev- 
en-month countdown for Nami- 
bia’s transition to indepen- 
dence, tentatively scheduled to 
begin on November L 

Angola, arguing that Cuban 
assistance is needed to counter 
the threat posed by Mr Jonas 
Savimbi’s Unita rebels, has 
proposed a four-year timetable, 
which officials privately 
acknowledge could he reduced 
to about two years. 

“What now remains to be 
seen is whether the political 
will exists to bridge tee gap,” 
says Dr Crocker. Time for a 
settlement is running out. The 
three countries set September 
1 as the deadline for agreement 
on the timetable. 


Protesters 
keep up 
pressure 
in Burma 


By Richard Gourlay in 
Bangkok 


ANTI-GOVERNMENT 
demonstrators maintained 
pressure on the military -domi- 
nated r ulin g party in Burma 
yesterday in countrywide pro- 
tests demanding a change in 
the 26-year-long one-party 
political system. 

Hundreds of thousands of 
people gathered in peaceful 
demonstrations throughout tee 
country demanding a return to 
democracy and tee removal oi 
U Mating Maung. who was cho- 
sen on Friday to be leader of 
the Burma Socialist Pro- 
gramme Party and president of 
tee country, diplomats in Ran- 
goon said. 

Only three days after being 
chosen as tee most likely man 
to placate a country alight 
with protest, U Muang Maung 
has clearly been rejected by a 
huge section of Burmese soci- 
ety as yet another party man 
representing a discredited sys- 
tem. 

Doctors, lawyers, actors and 
singers joined tee student lead- 
ers who have led demonstra- 
tions in which thousands have 
probably been shot dead by tee 
army over tee past two weeks, 
diplomats say. 

“The demonstrations must 
be threatening the Govern- 
ment now," one diplomat said. 
The Government and its auto- 
cratic leaders are still believed 
to be under tee control of Gen 
Ne Win, the man who ruled 
Burma since democracy was 
dropped 26 years ago. The gov- 
ernment in Rangoon appears to 
be unprepared to concede any- 
thing substantial to what 
seems to be an overwhelming 
majority of Burmese people 
who oppose it 

In Rangoon demonstrators 
carried banners that said “we 
want democracy - nothing 
else” while others said “This is 
the answer to the Govern- 
ment's call to test public opin- 
ion" referring to a commission 
13 Muang Maung set up on Fri- 
day to test tee desires and aspi- 
rations of Burmese people. 

Yet again the Government 
made no public statements 
about the demonstrations. Dip- 
lomats said the pressure may 
be beginning to tell on the 
thousands of soldiers who have 
been brought into Rangoon 
and who have had to stand by 
as speaker after speaker has 
denounced the Government 
they are defending. 

Marshalls are emerging as a 
kind of street leadership for 
the demonstrators, who lack 
any kind of formal opposition 
structure either at home or 
abroad. They have given 
orders that tee soldiers should 
not be provoked in the streets. 
Two weeks ago the army shot 
dead up to 3,000 unarmed dem- 
onstrators, diplomats believe. 


Copenhagen HandelsBank 



INTERIM REPORT 1988 
The Copenhagen HandelsBank Group 


Group profits from primary operations (profits before provisions, depredations, extraordinary items, 
revaluation of Securities and taxes) amount to Kr. 6916m compared with Kr. 5197m for the first half of 1987. 

When primary operating results are measured against shareholders' funds the return on capital em- 
ployed is 209 per cent pa. for the first half of 1988 against 170 per cent in the first halt of 1987. 

The consotidafed balance-sheet total was Kr. 1233 billion on June 30, 19881, which is Kc 2.1 bOfion lower 
than at hail-year 1987. 


PROFIT & LOSS ACCOUNT for first half-year 


(million kroner) 

Group 

1988 1987 

Parent company 
1988 1987 

Interest and commission on loans and mortgages 

2,840.6 

938.5 

2.667.7 

1.160.8 
758.9 

2^441.6 

889.9 

693.2 

2^327.5 

1,1185 

672.1 

Interest from banks, etc., and other interest income 

823.3 

Total Interest received, etc — 

4,802.4 

4,587.4 

4,024.7 

4.118.4 

1 merest on deposits 

Interest on subordinated loan capital 

Interest to banks and other interest paid 

1,645.2 

134.3 

1.332.0 

1,787.1 

129.8 

'1,3525 

1,593.9 

134.3 

1 .007.4 

1,742.8 

129.8 

1.066.1 

Total interest paid 

3,111.5 

3,249.4 

2,735.5 

2,938.7 

Net income from Interest and commission 

1.490.9 

1,338.0 

1,289.1 

1.179.7 

Profit on and revaluation of foreign exchange 

Other ordinary income 

96.7 

290.3 

34.4 

245.6 

90.7 

2S6.9 

63.4 

241.9 


1,877.9 

1 .618.0 

1,636.8 

1.485.0 


801.9 

740.6 

7622 

719.8 

Other expenses — 

384.4 

357.7 

351.6 

343.3 

Total expenses 

1,186.3 

1.098.3 

1,113.8 

1.063.1 

Profit before provisions, depredations, extraordinary items, 
revaluation of securities, and taxation 

691.6 

519.7 

523.0 

421.9 


NOTES TO PROFIT & LOSS ACCOUNT 
Revaluation of securities: 

Capital loss/gain on 



430.3 

-223.3 

412.7 

-226.1 


1062 

82.7 

152.0 

128.7 

Mortgages — - 

8.3 

2.9 

85 

25 


544.8 

-137.7 

573.0 

- 945 

of which relating to the Bank’s combi-pension pods 

87.9 

- 14.7 

87.9 

- 14.7 


4565 

-123.0 

485.1 

- 795 


- 

- 

505 

41.6 


Prospects for 1 988 - the Group 

As forecast in the 1987 annual report, Copenhagen HandelsBank still expects a substantial improve- 
ment in the primary operating results for 1988. Net profits are expected to represent a satisfactory return 
an the capital employed by the Group. In other words, a return better than the return on portfolio invest- 
ment in bonds. 

The net profits of the Group wifi naturally be very much dependent on general trends in the Danish eco- 
nomy - including exchange-rate trends and, not least, interest-rate trends. However, the reduction in the 
Bank's securities portfolio In the first half of this year and the continuing short duration of the portfolio 
does mean that interest-rate sensitivity is reduced lo a minimum. 

The consolidated profit and loss account tor the fast six months does not include provisions and depre- 
da ton end extraordinary items, since fosse are precluded by foe accounting standards oi the Danish 
Financial Supervisory Authority. 

fn the first six months of 1988 the requirement for provisions increased, in particular on loans to the 
personal sector. As a result, total provisions for foe full year are expected to show a fairly big increase as 
compared with 1987. 

When evaluating the expected profit tor 1988, analysts should also take into account an extraordinary 
expense of about Kr. 50m, which is Copenhagen HandelsBank's share of the first payment to the new 
Depositor Guarantee Fund, 

The Copenhagen HandelsBank Group stffl has a tax deficit of about Kr. 500m left over from 1988, 
which can be carried forward to 1988. 




St ; :VJ. ■: ' ' 


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HNANOAL TIMES WEDNESDAY AUOUST 


24 1SS8 


AMERICAN NEWS 


El Salvador 
left-wingers 
to contest 
election 


Quayle runs into more controversy 


By Lionel Barber in Washington 


By Tim Coone in Managua 


TWO opposition leaders in £3 
Salvador said yesterday they 
would take part in presidential 
elections next March. 

Mr Guillermo Ungo, presi- 
dent of the National Revolu- 
tionary Movement (MNR) and 
Mr Ruben Zamora, president of 
the Popular Social Christian 
Movement (MPSC), both of 
whom are linked to the left 
wing guerrilla forces, said they 
wanted to test the govern- 
ment's desire for peace in the 
war-torn country. 

Both leaders went into exile 
earlier this decade following 
threats by death squads and 
the murder of other opposition 
politicians. Both returned to El 
Salvador earlier this year after 


Vice President George Bush’s 
running-mate Senator Dan 
Quayle of Indiana returns to 
the campaign trail today 
dogged by controversy bat 
determined to stay on the 
Republican ticket 

Despite vigorous endorse- 
ments by Mr Bush, Senator 
Quayle continued to draw fire 
from the American press yes- 
terday while several Republi- 
can party leaders voiced 
doubts about the Vice Presi- 
dent's choice. 

The Quayle controversy has 
become almost the sole focus 
of the American presidential 
rampsrfgn since the 41-year-old 
Indiana Senator admitted last 
week that he used wealthy 
family contacts to secure a cov- 
eted place in the National 


Guard, thus avoiding combat 
in Vietnam. 

It has become almost a trial 
of strength between the Bush 
campaign and the American 
media which is pursuing the 
story voraciously. It is still 
unclear where the sympathies 
of the American public lie, 
though Senator Quayle 
received a rousing reception at 
a Veterans of Foreign Wars 
convention in Chicago on Mon- 
day night. 

While Mr Bush’s advisers 
have decided to ride out the 
storm, buoyed by post-conven- 
tion polls that show him ahead 
of Mr Dukakis, fresh allega- 
tions surfaced yesterday about 
Senator Quayle’s association 
with a Washington lobbyist 
who later posed nude for Play- 


boy magazine. 

The allegations coincided 
with a Wall Street Journal 
report which said that Senator 
Quayle had flanked a political 
science course at university, 
one day after the acci- 
dent-prone Senator said on 
television that he was a "pro- 
verbial C-plus student". 

Mr Tommy Thomas, chair- 
man of the Bush steering com- 
mittee in Florida, said: "I think 
Quayle should assess and if lie 
feels like he is hurting the 
ticket, he ought to be man 
enough to step aside." 

Governor John McKernan of 
Maine said that when Senator 
Quayle’s name first came up at 
the Republican nominating 
convention in New Orleans 
last week, he reckoned it was a 


mistake. "Unfortunately, I’ve 
been borne out to be right.' 

Governor Thomas Kean of 
New Jersey, who delivered the 
key note address in New Orie- 
ana . "We bsveyetto see 
whether or not he grows into 
the stature that the vice presi- 
dential candidate should have." 

While tike flap over Senator 
Quayle’s Vietnam war record 
may soon subside, other 
embarrassing disclosures in 
the US press about the young 
Senator’s past will keep the 
con tr ov e r s y alive, much as 
happened to Mr Gary Ha rt, the 
former Democratic presidential 
candidate. "He may die of a 
cuts," said Mr Jim 
Bacchus, an expe ri enced Dem- 
ocrat lawyer In Florida. 

The Cleveland Dealer 


reported yesterday that the 
Indiana Guard that Senator 
Quayle joined in May 1968 had. 
a near freeze on enlistments 
starting seven weds before he 
signed up. He subsequently 
found a mot in a public rela- 
tions uuft- 

The Los Angeles Dally News 
reported that two farmer attor- 
neys for the onetime lobbyist 1 
Paula Parkinson said that she 
had told the FHZ in 1981 that 
Senator Quayle had proposi- 
tioned her during a Florida I 
golf trip 

The attorneys said they had ! 
reviewed notes of their inter- < 
views with the FBI at the time.- 
The FBI however later found 
no evidence that sexual 
favours had been traded for 
Congressional votes. 


Political killings 
raise heat of 
Mexico poll row 


By David Gafdnar in Mexico Cfty 


THE process of reviewing 
Mexico’s disputed election 
results faced further hold-ups 
yesterday, after the murder of 
four students linked to the 
left-wing opposition. 

The four young man yam 
shot dead in tiuar «iaa 
working-class district of 
MexicoCity, in a sbnflariy pro- 


la reviewing congressional 
results district by district, 
prior to constituting them- 
selves formally as the Electoral 
Colletts, which must ratify the 
presidential election. 

The PRI, as things stand, 
could win only 250 seats 
n g »rtn«t 210 for the opposition. 
Opposition leaders say they are 


MexicoCity, in a siwflariypro- to Jet through wUh- 

f-narinnai style to the election * de ^ atB all but SO or 40 
eve assassinations of two i dose rnK where ballot rigging is 

aides to Cuauhtemoc gpspected. 

the left-wing nationalist leader. Sunday night, there was 


the Esquipulas peace accords, 
in which the government com- 
mitted itself to democracy. 

Their two organisations form 
part of the Revolutionary Dem- 
ocratic Front (FDR), seen as 
the political wing of the Fara- 
bundo Marti National Libera- 
tion Front (FMLN), the guer- 
rilla army fighting the 
US-backed government, 
although the FMLN and the 
FDR differ over whether to 
contest elections and the con- 
duct of the war. 

The FMLN boycotted last 
year's National Assembly elec- 
tions in which the far-right 
ARENA party defeated the 
Christian Democrat party of 
President Napoleon Duarte. 

Earlier this year the FDR 
formed a new grouping with a 
third politi cal pa rty, the Social 
Democrats (PSD) known as the 
“Convergencia Democratica”. 
The three parties are expected 
to form an alliance for the 
presidential elections. Leaders 
of another left-wing party, the 
UDN (National Democratic 
Union) returned to El Salvador 
last July and an announce- 
ment is shortly expected from 
them on the elections. 

On the military front, the 
army recently admitted suffer- 
ing 2,000 casualties over the 
past year. The FMLN claims to 
have inflicted 3.750 casualties 
on the army in the first six 
months of 1988. The FMLN also 
claims the death squads make 
fair elections impossible. They 
say that in the same period 
security forces have been 
responsible for 273 murders 
and the disappearance of 289 
opposition activists. 


Keeping Right at America’s crossroads 

Deborah Hargreaves examines the political roots of staunchly Republican Indiana 


MR TOM BROWN, a real estate 
developer in Hammond, Indi- 
ana, is in no doubt about who 
will get his vote in this year’s 
presidential election. Tm for 
Bush and a tough line on 
defence.” he says. 

Dan Quayle, Republican Sen- 
ator for Indiana and George 
Bush’s running mate in the 
November election stands with 
his fellow “Hoosiers" of Indi- 
ana with his hawkish stance 
on defence issues. 

Mr Brown, who was plan- 
ning to leave the country if the 
Rev Jesse Jackson had come 
anywhere near being elected, is 
typical of this rustbelt town of 
north-west Indiana, where trim 
frame houses abut gloomy 
steelworks and factories. 

Like most of the Mid-west, 
Indiana is a land of smoke- 
stacks and grain elevators, 
with a majority off its 5m resi- 
dents clustered in small, strag- 
gling towns like Hammond. 

Indiana is also strong on law 
and order - one of Mr 
Quayle’s themes - and is one 
of few states to extend the 
death penalty to minors. It is 
currently holding a 14-year old 
from Gary on death row for 
stabbing bar bi hl e teacher. 

But the privileged Mr 
Quayle’s own brand of "coun- 
try club Republicanism” is at 
odds with the traditions of the 
state’s predominantly manu- 
facturing and agricultural 
workers. Indiana preserves a, 
staunch Republican tradition 
’ rooted in its smalltown conser- 


vatism. 

“This is a state where you 
see* people voting Republican 
who would certainly be voting 
Democrat if they were in Illin- 
ois or Ohio,” says Mr Jack 
New, who served 10 years as a 
Democratic state treasurer. 

Indiana lies at the heart of 
the Midwest, with a state 
motto proclaiming itself the 
Crossroads of America. But its 
firmly entrenched conservative 
values often set it apart from, 
its less-decided neighbours. 1 
The state has voted Republican 
in every election since the war 
except 1964, and has elected a 
Republican Governor for the 
last 20 years. 

"Here you don’t really have 
a choice between a conserva- 
tive and a flaming liberal,”' 
says Mr New. It’s all either 
conservative or more conserva- 
tive." Even Democrats are 
forced to run very conservative 
campaigns and their renutidate 
in the gubernatorial race, Mr 
Evan Bayh, is a Democrat who 
is running a wunp ai g n centred 
around efficient government 
and a pledge to keep taxes low. 

Mr Bayh, as the son of long- 
time Democratic senator Birch 
Bayh (who was voted out in 
1980 in favour of Mr Quayle), 
enjoys considerable personal 
prestige. He is tipped to be 
voted in as Governor this 
autumn. 

Indiana is a state at the cen- 
tre of the rustbelt, with one 
fifth of the nation’s steel pro- 
duced in its north-west comer. 


Ford predicts job cuts to 
compete with Japanese 


By John Griffiths in London 


FORD of Europe still has a 
long way to go to match the 
productivity of the world's 
most efficient - mainly Japa- 
nese - carmakers and will 
need further cuts in its work 
force, according to Mr Alex 
Trotman jts new chairman and 
chief executive. 


The action is being foreshad- 
owed by Mr Trotman despite 
Ford of Europe having cut 
employment by 40,000, to 
100,000, since 1979 and its out- 
put of vehicles having risen 
slightly from 1.7m that year to 
a forecast 1.8m in 1988. 


Mr Trotman, in an interview 
with the Economist Intelli- 
gence Unit*, said that Ford bad 
not drawn up a firm job cut- 
ting programme. "It might be 
zero cutback for a couple of 


years or 6 per cent in one year, 
depending oqnjjpw the work- 
load goes." £> 

“It will be necessary to 
become considerably more pro- 
ductive than we are today if we 
are to remain competitive with 
the best companies in the 
world," he warned. 

British-born Mr Trotman, 54, 
who had been Ford of Europe's 
president since 1984 before tak- 
ing over the chairman and 
chief executive's role in March, 
said that Ford was committing 
a further $lbn in quality-re- 
lated investment over the next 
five years in addition to $lbn a 
year already scheduled in capi- 
tal investment. 


However, he ruled out any 
completely new production 
facilities for them. "The invest- 


ment we have in mind for 
capacity increases is all within 
the walls ... we don’t have 
any new plant in mind". 

Mr Trotman dismissed sug- 
gestions that the strength off 
the D-Mark would lead to Ford 
shifting its production plans in 
favour of lower-cost countries 
such as Spain - where, for 
example. Volkswagen now pro- 
duces the Polo model having 
bought the Seat group. 

West Germans were already 
waking up to the fact that the 
country had become too expen- 
sive, said Mr Trotman, and 
they would soon respond to 
that realisation “strongly.” 

*European Motor Business, 
quarterly from Economist Intel- 
ligence Unit, PO Box 1DW, 40 
Duke St, London WlA 1DW. 
£225 or $445 p.a 


Australian group to build latex 
plants in Sri Lanka, Thailand 


By Chris Sherwell in Sydney 


PACIFIC DUNLOP. the 
Australian-based multinational 
industrial group, yesterday 
announced it would spend 
ASTOm building two new facto- 
ries in Sri Tanka and Thailand 
“to meet strongly rising world 
demand for latex products.” 

Through its Ansell rubber 
products division, the group is 
the world’s largest supplier of 
surgeon's gloves, medical 
examination gloves and con* 
deans. It also has nearly 10 per 
cent of the world market for 
balloons. 


which are expanding princi- 
pally because of the worldwide 
AIDS scare. 


The new factories are 
designed to maintain Ausell's 
position in these markets. 


Pacific Dunlop said the Sri 
Lankan facility, to be built 
near Colombo, would be prod- 
ucing gloves and condoms by 
the end of next year and would 
employ 1,000 people at full 
capacity. 

The decision, a sign of confi- 
dence in the strife-tom coun- 
try, was made because of Col- 
ombo’s good port facilities, the 
factory’s location in an export 
zone and cost attractions. 
Pacific Dunlop said in a state- 
ment 

The Thai factory, located 


next to Ansell's existing facili- 
ties near Bangkok to promote 
economies of scale, is to be the 
group’s main international bal- 
loon production centre. 

Separately, the group also 
announced plans to consolidate 
its balloon packaging and 
printing operations for the US 
market at Ansell’s existing 
facility in Juarez, Mexico. 

It irill employ balloon-mak- 
ing technology developed by a 
Los Angeles company Pacific 
Dunlop acquired last year and 
wfl] enable Ansell to increase 
its balloon capacity by more 
than 100 per cent within 12 
months and to quadruple it 
within three years. 


Swiss engineering sees rise in orders 


By John Wicks in Zurich 


SWITZERLAND’S engineering 
industry had an unexpectedly 
good first half; according to the 
Swiss association of machinery 
manufacturers (VSM). Orders 
received by 200 member com- 
panies were up 13.4 per cent on 
the corresponding 1987 period 
to a total of SFrlO.ebn ($&6bn). 

Although new business was 
lower in the second quarter 
than in the preceding three 
months, VSM said yesterday 


that the "positive trend” had 
continued despite earlier Seats. 


Swiss metal and machine- 
building companies maintained 
their strong position on world 
markets, export orders rising 
by as much as 1&5 per cent in' 
the first half to SFrfMJbn. 


means that manufacturers bad 
an overall backlog correspond- 
.ing to 12 months' production, 
compared with 6.8 months a 
year earlier. 


With domestic orders up &5 
per cent to SFrtfbn, orders in 
hand rose by 2 per cent over 
the year to SFrl6bn. This 


Dr Martin Erb, VSM director, 
said the international market 
had proved more resistant than 
bad been feared after last Octo- 
ber's stock-market crash and 
the subsequent w eakening of 
tile dollar. 



Dan Quayle: rustbelt 
Republicans in his home state 


and a strong motor parts 
industry linked to Detroit in 
the north-east These regions 
were threatened with near-de- 
sertion in the industrial 
retrenchment of the early 
1980s. but are now booming 
again on the back of a lower 
Hniigy arid a manufacturing 
revivaL 

Nevertheless, although some 
laid-off workers are back in the 
blast furnaces, the rustbelt is 
run on a slimmer workforce 
than before. Unemployment in 
Gary remains stuck at 8 per 
cent — above the state’s aver- 
age of 4.5 per cent and the 
national average of 5.4 per 
cent The once- strong steel 


T yn i rms have lost their grip and 
many smaller plants are us i ng 
non-union labour, undercut- 
ting the traditionally high 
wages of the steel industry. 

The state has seen its popu- 
lation drop in recent years as 
workers have headed south for 
jobs. This reverses the trend of 
the last century, when 
migrants flocked to Indiana 
from yontnflky and the Caroli- 
na a, bringing with the m co n- 
servative traditions. "What 
many people forget is that the 
southern third of this state is 
an extension less of the Mid- 
west than of the Sooth," com- 
ments Mr Tim Tilton, vice 
rhairmnn of the Rlnnming ton 
County Democratic party. 

The Southerners brought 
with them strong evangelical 
hwiigfc, and an influential Bible 
Belt nestles in the rolling corn- 
fields Of SOUthem TmUana. a 
controversial issue in this 
year’s gubernatorial race is a 
referendum on the ip galisstinn 
of gambling with the introduc- 
tion of a state lottery, which is 
expected to mobilise many 
Religious Sight voters. 

The strong Republican party 
organisation and tradition of 
patronage have helped mould 
Indiana's values in recent 
years, and even Mr Tilton 
admits that the Democratic 
party has been “lethargic’’. 

“There is a great fear in this 
state of government becoming 
too large,” says Professor Buss 
Hampton, in the political sci- 
ence department of Indiana 


The car, fitted with a loud- 
speaker, belonged to the Ififc 
wing activist father of one of 
the students, and. bad been 
used to mobilise protest to his 
district against the official 
results of the July 6 elections. 

These gave victory to Mr 
Carlos Raftwas de Gortari, the 


cases where ballot rigging is 

suspected. 

On Sunday night, there was 
an uneasy stand-off to Con- 
gress between army troops and 
opposition deputies, who tried 
unsuccessfully to gain access 
to the ballot boxes, kept under 
armed guard in the basement 


o£ the Chamber of Deputies. 

Mr Poxflrio Munoz Ledo. the 
former FRI president and chief 


University. “It’s really ‘a cany-, 
over from 19th century attl- I 
tudes; a lot of Hoosiers take j 
pride to the fact that they don’t 1 
take advantage off the federal 
money available to them." : 

For this reason, government 
to in tiinTiH is run on a shoe- • 
string. Successive Republican [ 
gfiwiiwis t y«tim$ have put a pri- i 
ority on attracting new indns- j 
try to tire state, particularly 1 
offshoots of. the car industry. \ 
as well as keeping unemploy - 1 
ment and taxes low. However, 
little has been spent on the 
state’s in fr astr uc ture and noto- 
riously poor education system. 

The southern part of the 
state; with its undulating corn- 
fields anil picturesque court- 
houses, has been blighted this 
year by the Midwest drought. 
As shrivelled crops have been 
ahan<fnnfl<i by sweating farm- 
ers, the Democrats have tried 
to on fppHngg of irri- 

tation at any delay in federal 
drought relief. But the farm 
vote is expected to remain true 
to its Republican tradition. 

Mr Boo Thrasher, who owns 
a 500«cre cattle form just out- 
ride Bloomington, is a commit- 
ted Democrat, and wont talk 
to any of fals fellow farmers 
about pnUftiwt Wfln» of their 
strong right-wing views. "But 
we’re all worried about the 
drought, the heat and this 
greenhouse effect,” he says; 

Despite the heat, there 
uppers tifri* cfamoe of Indiana 
wanning to Mr Thrasher’s 
views. 


Carlos Salinas de Gortan, ine ~ 

Institutional Revolutionary Carden as strategist, yarned 
Party (PRI) candidate but their *]“*• ur *5f s 

veracity is being contested by tion was cleaned up , the 
mu. nMMMiHnn wnnld rielftv tno 


•Blowy uuub Ti.l 

both the Cardenas coalition 
and the right-wing opposition- 
In Congress the PRI and 
opposition are at loggerheads 


opposition would delay the 
Electoral College until Decem- 
ber 1, when Mr should 

be invested as president. 


Venezuela court orders 


arrest of tyre executives 


By Joe Mann In Caracas 


A Venezuelan criminal court 
ordered the arrest off the chief 
executives of the country’s 
three major tyre manufactur- 
ers for raising their prices fay 
25 per cent without govern- 
ment permission. The order is 
unprecedented. 

The presidents of the Vene- 
zuelan subsidiaries of Fire- 
stone and Goodyear, as well as 
the top executive at Neu- 
maven, a tyre producer owned 
by Venezuelan investors, were 
accused of "price speculation" 
in an action initiated by the 
Government’s Superintendent 
off Consumer Protection. Under 
Venezuelan law, individuals 
who sell "prime necessity 
items" at prices higher than 
those authorised can he sen- 
tenced to Jail for between six 
a nd 30 months. 

This action, coming at a time 
when the current Government 
is trying to promote new for- 
eign investment, is seen by 
businessmen as a major official 


blunder. One foreign executive 
commented: "This type of arbi- 
trary move makes Venezuela, 
look very bad to international 
investors, and mafcas me think 
twice about recommending any 
new investments here." _ . 


The Administration, led by 
President Jaime Lusinchi, will 
end its five-year term next Feb- 
ruary and is trying to slow 
price rises during Its last 
months. One press report said 
that the arrest warrants were 
meant to be a "lesson" to com- 
panies raising prices without 
official approval 


The tyre' incident follows a 
recent action by another court 
that also caused negative reac- 
tions among Venezuelan and 
foreign investors alike. A mer- 
cantile court ordered the Vene- 
zuelan subsidiary of Owens-Ill- 
inois, the American 
glassmaker. to Bril a specific 
share of its output to a buyer 
at prices defined by the court 


WORLD TRADE NEWS 


Reagan signs 
Trade Bill 
and backs 
Bush policies 


EC to visit S Korea to ease tensions 


By William Dawkins in Brussels 


US President Ronald Reagan 
signed into law a sweeping 
overhaul of US trade roles yes- 
I terday, offering some political 
I credit for the tougher trade 
stand to Mr George Bush, the 
Republican presidential candi- 
date, Renter reports from Long 
Beach. 

Speaking to a large audie nc e 
of dock workers and digni- 
taries at this busy port city 
south of Los Angeles, Hr Rea- 
gan said revised laws were 
necessary to break down pro- 
tectionist trade barriers and 
Mock "international thievery” 
of American ideas. 

"And yet this bill is just the 
latest step to that effort, which 
began the first day [Vice-Presi- 
dent] George Bush and I 
entered office and has already 
opened vast markets to Anted-, 
can products all around the 
globe." Mr Rea Kan t aW . 

"It hasn’t been easy, but I 
have never doubted our ulti- 
mate victory, because we are 
riding a global wave.” 

The trade law represents 
more than three years of work 
by Congress to craft rules of 
retaliation against countries 
believed to maintain unfair 
barriers to US exports. The 
Senate gave its final assent to 
the Trade Bill on August 3. 

‘ There was broad bipartisan 
support for stifTer rules to cut 
US trade shortfalls - a record 
5 171 bn to 1987. A principal 
architect was Mr Lloyd Ben* 
tsen, the former Senate 
finance committee chairman 
who Is now the Democrats’ 
vice-uresideatial nominee. The 
US tradeshortfen for 1980, the 
last year before Mr Reagan 
took office, was $81.4bn. 

Countries including Japan, 
Taiwan and West Germany are 
among the evident targets of 
the new trade laws, which 
have stirred widespread 
resentment and criticism from 
abroad. US trade officials will 
he obliged to name countries 
that ran persistent large trade 
surpluses by using question- 
able trade tactics. The officials 
then must seek voluntary 
improvements and retaliate if 
negotiations fan. 

Mr Reagan said that the US 
in the future would “insist on 
standards of fair play,” indud- 


MOUNTING trade tensions 
between the European Commu- 
nity and South Korea will be at 
the top of the agenda when an 
EC delegation meets senior 
ministers in Seoul next month. 

Mr Willy De Clercq, Euro- 
pean Commissioner for Exter- 
nal Relations, win lead the EC 

tpfrm in Hip fifth aimnal high 

level talks with Korea between 
September 13 and 16. Among 
the sensitive bilateral issues 
for discussion wfll be EC alle- 
gations that its companies are 
TTiPAting imfafr South Korean 
trade barriers like high tariffs, 
trading l ice n ce s and a restric- 
tive import surveillance sys- 


tem. 

South Korea is meanwhile 
accused of directing its exports 
to the EC Hke a laser beam, 
aiming at sensitive sectors hke 
microwave ovens and video 
recorders and selling at artifi- 
cially low prices. As a result, 
the EC trade deficit with South 
Korea rose to a record 
Ecu2.6bn (£L7bn) last year, up 
from Ecn572m fa 1985. 

Mr De Clercq is also expec- 
ted to repeat appeals to South 
Korea to cut shipbuilding 
capacity and to raise prices. He 
will remind Seoul that the EC’s 
patie n c e is wearing thin at its 
continued refusal to join inter- 


national efforts to restructure 
shipbuilding. 

Another sore point is the 
EC’s claim that its companies’ 
patents are allowed inadequate 
legal protection in South 
Korea, compared with that 
afforded to their US competi- 
tors. Brussels last year with- 
drew the trade privileges 
allowed to South Korean 
exporters to the EC under the 
generalised system of prefer- 
ences, in retaliation for Seoul's 
refusal adequately to improve 
patent protection for European 


The Commission . also 
believes the South Korean 


authorities are discriminating 
unfairly in favour of US insur- 
ance companies operating to 
the country. 

The Commissioner is to meet 
the South Korean trade and 
industry and foreign ministers, 
as well as President Roh Tae 
Woo. with whom Mr De Clercq 
is expected to discuss broader 
international issues. 

These are expected to 
include the Uruguay round of 
talks in the General Agree- 
ment on Tariffs and Trade, in 
which Seoul wants to play a 
more prominent part, relations 
with Japan and the US, and 
East-West relations. 


Seoul looks for fair play from EC 

Maggie Ford and Caroline Dewhurst report on worries in S Korea 


tog identifying and acting 
against countries that make 
and sell goods to the United 
States which copy American 
technology. 


C oncern is g r o win g m 
South Korea that it is 
becoming the victim of 
a European Community plan 
designed to restrict imports, 
particularly electronics. 

Reports that the EC Commis- 
sion plans to impose dumping 
margins of up to SO per cent on 
South Korean-made video tape 
recorders have also h*rf ghtewpH 
worries that investigators 
looking into the allegations of 
dumping are not behaving to a 
fair manner. 

Three South Korean con- 
glomerates, Daewoo, Samsung 
and Goldstar, have voluntarily 
suspended exports of VTRs and 
colour television sets for the 
past month to advance of the 
EC ruling expected shortly. 

The suspension follows a 
surge of VTR imports to the 
first half to 700,000 units, 
against an expected total for 
the whole year of 830,000. 
Exports to the EC of VTRs 
were worth $31 7m last year, 
and have risen sharp l y since 
1985 when exports totalled only 
74JJ00 units. 

The export surge, which has 
clearly sharpened European 
perceptions that the South 
Koreans are engaging in dump- ' 
tog, appears to have resulted 
from currency c al cn fa ti ftw* 
EarBer to the year, to line with 
government policy to diversify 
exports from the US which last 
year ran a trade deficit of 
$9Abn with South Knrpw . man- 
ufacturers developed new mar- 
kets in both Europe and Japan. 

They calculated, correcfly as 
it tu rn ed out, that the South 
Korean currency would appre- 
ciate against European curren- 


cies and the yen in the second 
half of the year. This prompted 
a rush cf shipments to the first 
half which coincided with 
buoyant European demand, 
cutting into the market share 
of both Japanese and European 
companies. 

The action against VTR 
impo rts is on e of eight anti- 
dumping suits pending a gainst: 
South Korean companies. The 
others involve microwave 
ovens, small screen colour 
TVs, videotapes, polyester fihn, 
polyester yarns and oxalic and 

gfatawir arirfo , 

A complaint about footwear 
exports, mainly to Italy, 
appears to have been set aside 
following a voluntary restraint 
agreement The EC recently 
upheld its first complaint in 
the services industry, a gainst a 
South Korean shipping Ene. 


Pressure against ' South 
Korea appears to have esca- 
lated since the Asian country’s 
products started to threaten 
market share held by Euro- 
pean manufacturers such as 
the electronics giant Philips; 
rather than simply reducing 
the share of less competitive 
Japanese imposts. 

Companies in Seoul are ad- 
eemed that European compa- 
nies and officials regard South 
Korea as a "second Japan,” 
intent on gaming- market shar e 
at any price. They note that 
their products have a higher 
profile in Europe than similar 
products from other newly 
industrialised countries such 
as Taiwan or Hong Kong 
because they are marketed 
under the South Korean com- 
panies’ own mnwaw. 


The companies say. however, 
that a number of differences 
exist between Japan and Smith 
Korea both in the nature of 

their internal economies and to 

their export strategy. These 
differences, they believe, may 
not yet be folly dear to Euro- 
pean officials. 

One difference relates to the 
method of dete rmining dump- 
ing margins, under which 
Investigators compare the 
export price off a product as it 
leaves the factory with the 
local price as it arrives at the 
retailer, before taxes. 

The size and complexity off 
the notorious Japanese distri- 
bution network, where layers 
off middle men take their cut, 
m e an s that dumping margins 
are almost a foregone conclu- 
sion. But the South Korean dis- 
tribution system is quite sim- 
ple Mid results, exporters say, 
’to a domestic price that may be 
httle different from the export 
price. 

In the case of a Daewoo mid- 
dle range VTR for instance, the 
South Korean domestic price is 
won 243 ,000. jumpiagto a retail 
price of won 365,000 when 
VAT, consumption and defence 
taxes are added. Daewoo mW 
tiie export price off the VTR 
varied between European 

countries, if the VTR had to be 

equipped for the PAL TV sys- 
tem used to some European 
countries, its export price 
would be higher than the 
domestic price. 

He said that It would be 
unprofitable for Daewoo to 
export VTRs to Europe at 
prices 30 per cent below Euro- 
pean levels and the company 
could not afford to do this to 


.ga i n market share. Lower 
wages and tighter budgets may 
also contribute to lower domes- 
tic prices than to Japan. 

One foreign consultant dose 
to the issue said an EC Investi- 
gation in 1986 following dump- 
ing complaints over microwave 
ovens found margins that were 
so s ma ll that the outcome of 
the investigation has never 
been officially d iscl o se d, 

“It is d i fficult to see how the 
EC could find dumping mar- 
gins as high as 30 per cent for 
VTRs," he said. “The compa- 
nies should ask for the calcula- 
tions to be revealed if the rul- 
ing is confirmed. " 

One result of that Investiga- 
tion, however, has been a 
senes of announcements by 
South Korean producers set- 
ting up factories to Europe. 
The companies decided several 

years ago that their strategy in 
Europe should be different 
from that pursued to the US, 
where simply exporting goods 
had invited protectionism. 
South Korean companies have 
now set up or announced plans 
foJMaeariy a dozen European 
factories. 

They have not so far 
otoratted attention under the 
riew EC "screwdriver legisla- 
tion. which affects companies 
importing parts for local 
assembly, mainly because 
many of the factories are still 
at toe stage of being set up. 

Unless a better understand- 
“E develops between Seoul 
and Brussels, aggrieved feel- 
ings may develop into more 
•ban arguments about dump- 
tog margin calculations, affcet- 
mgthe long torn interests of 
both rides. 


•Ski 

i 1 


Ik 


v 


FINANCIAL TIMES WEDNESDAY AUGUST 24 1988 



THE IMPACT 
BEARING STRUCTURE 
OP THE 

HONOCOQUfi BODY. 


It Is a surprising fact that only Mercedes-Benz, 
of all the world's car manufacturers, routinely test 

their models for off-set frontal 
collisions. . Why? Because 
government crash test 
legislation de- 
mands that car 
makers meet 
requirements only 
for 100% head-on collisions - so that is the "routine 
they all follow. Except Mercedes-Benz. • 

Their research shows. that in Germany, for' 
example, 40% off-set frontal collisions happen three 
times more frequently; so Mercedes-Benz design 
briefs demand that all" chassis ' and crumple zones . 
be tailored specifically, to disperse the unique 
stresses of both types of collision. Which means 
impact energy is absorbed . progressively 
and displaced into forked longitudinal 
members mounted onto . extremely rigid sidewall, 
floor pan and transmission tunnel structures. The 
energy is therefore diluted by being transmitted and 
absorbed in three different directions. 

A Crash Test Every Three Days 


interests. Mercedes-Benz allowed it to be infringed 
in everybody's interests, so other car makers could 
incorporate the idea into their own body designs. 
A gesture that speaks for itself. 

In 1959. Mercedes-Benz became the first manu- 
facturer to systematically crash test and roll-over 
test their cars. In that year, 80 were destroyed in 



Mercedes-Benz design 
their cars for the accident 


SCIENTIFIC CRASH TESTING. CIRCA I9S *. 

the search for greater passenger security. Since then, 
no car maker has placed greater emphasis on crash 
testing, and many others reap the benefits simply 
by adopting the results of Mercedes-Benz 
pioneering research. 


State Of The Art Safety Cell 


that happens most 


Mercedes - Benz conduct a 
crash test every three days, 
on average. Because safety 
research is an integral 
part of. the Mercedes-Benz 
design_process. many tests 
are conducted on compo- 
nents and prototypes prior 
to full scale production of a 
new model. Consequently, the safety development 
team are well placed to Impose their priorities on the 
fundamental design of a can Today's Mercedes-Benz 
models are the most thoroughly tested and safest 
the company have ever built. 

The Mercedes-Benz safety steering system, as 
an example, is fitted with a distorting cup within 
the steering wheel, and a collapsible, corrugated 
column that will not intrude into the passenger , 
compartment in either a head-on or off-set 
collision. Nor can the clutch or brake 
pedals behave like blunt instru- 
ments. Because 
of the likelihood . 
of severe. 

accident injuries to the feet, the pedals : are 
designed to swing away from the driver on impact 




TUB. ENERGY ABSORBING 
STEERING COLUMN, 


The Fathers Of Automotive Safety . 

The history of Mercedes-Benz safety cpn- v 

scfousness dates from 1931 when they developed 
independent front suspension ■ to ensure safer 
roadholding. And : as long as thirty -seven years 
ago! long before "crumple zone" and "safety cell" 
became part of car industry jargon. Mercedes-Benz . 
patented the first impact -absorbing body shell 
But rather than protect the patent in their own 



Engineered Like No Other Car 
In The World. 


Computer-aided engineering, combined with exten- 
sive use of high strength, low-alloy steel, ensures 
that Mercedes-Benz monocoque body shells are 
not only light, but are also outstandingly strong. 
Such a highly rigid shell is the basic safety element, 

its front and rear sec- 
tions designed to 
yield progressively 
in major accidents. 
They absorb kinetic 
energy and divert the full 
force away from the passenger 
safety cell. Strong cross-members are 
built into the floor pan to stiffen 
further the safety cell's resistance to 
side impact. Additional single section 
roof frame cross -members enhance the total load 
bearing capacity of the roof in front, side and 
roll-over impacts. 

How The Use Of Air Can Reduce Injury Risk 

All inertia-reel safety belts fitted 
to the front seats of Mercedes-Benz 
cars, have electronic belt tensioners 
as standard. Above a predetermined level of impact, 
the tensioner is activated and pulls 
the belt taut around the body 
in milliseconds, reducing forward 
movement of driver and front seat passenger. 
Above certain speeds, however, impact 
injuries can still occur no matter 
how sophisticated the seat belts are. 

Therefore. Mercedes-Benz also offer FROM IMPACT SIGNAL TO 

INFLATION IN 2S MILLISECONDS. 

an electronically controlled airbag that is neatly 
stowed in the steering wheel hub. This innovatory 
safety feature has been available since 1981 and is 
already fitted to 400.000 Mercedes-Benz cars. A 
normally invisible guardian, it inflates in milliseconds, 
under impact, to cushion the driver's head and greatly 
reduce the risk of chest injuries. Further proof that 
the Mercedes-Benz commitment to safety is uncom- 
promising. unchallenged and continues unabated. 





* 


A-Z60FTL 


I. 


1988 



UK NEWS 


Army to scrap special car 
plates in security move 


By Tom Lynch in London and Our Belfast Correspondent 


THE Ministry of Defence said 
yesterday that tire distinctive 
car number plates used by 
British service personnel in 
West Germany were to be 
scrapped in a move to protect 
off-chity service members of the 
armed services and their fiumi- 


The measure has emerged 
from tire British Government's 
emergency review of security 
in the province after the bomb- 
ing on Saturday which vm«H 
eight soUders, wounding six 
critically, and the death on 
Monday of a navy recruitment 
officer in a Belfast car bomb- 


Toan King; the Northern 
Ireland Secretary, was kicked 
in talks with senior s ecurity 
advisers in Belfast yesterday, 
but was expected to By to Lon- 
don today or tomorrow for a 
meeting with Mrs Margaret 
Thatcher, the British Prime 
M ini s t er . 

Mr King spent most of the 
day in protracted discussions 
with aides at Stormont Castle, 
in a bid to finalise a package of 
measures in response to the 
recent wave of ter roris t mur- 
ders in the province, the UK 
mainland and continental 
Europe. 

IRA gunmen are thought to 
have used ndhiary nmn ^ 
plates to pick out and kill a 
serviceman in plain clothes in 


the Belgian channel port of 
Ostend earlier this mouth. The 
Plates were thought to have 
been a factor In other attacks 
on off-duty British soldiers in 
Europe. 

Mr Archie Hamilton, the 
junior armed forces minister, 
said standard B ritish number 
plates would be fitted to the 
95,000 vehicles belonging to 
service personnel and British 
civilian support staff. This, 
would cost up to £2m. 

Army sources acknowledged 
that British-registered care 
parked outside dubs, bars and 
restaurants in non-tourist 
areas of G ermany would stiQ 
stand out. 

For the past few days, Mr 
King and his advisers have 


before the Prime L 

These measures Inclu de the 
deployment of extra troops in 
Ulster, an end to suspected ter- 
rorists' right to silence, and the 
removal of Provisional Shin 
Fein, the IRA's political wing, 
from political influence by 
speeding np proposals to 
r e q uire election candidates in 
Northern Ireland to take an 
oath renouncing all farms of 
violence. 

ffirm y Wn Tipf ann MP-Mr 
Gerry Adams, who has not 
taken Ids seat at Westminster- 
and several local coundHozs. 
Pressure for a ban on the party 


has been resisted in the past in 
the groun ds that it would be 
hard to enforce and another 
front organisation would be 
easy to form. 

Sion Feta has already raid it 
would take steps to avoid being 
trapped by any new laws. 
Although b itainmg n t without 
trial, which is being demanded 
■by Ulster Unionists, does not 
appear to be a likely coarse ot 
action, Sinn Frin said republi- 
can activists were drawing up 
contingency plans to co unt e r 
tt. 

Mr Adams, the party pcesfr 
dent, said he understood repub- 
licans ware treating the intern- 
ment issue seriously. "Some of 
the people opposing intern- 
ment do so on the grounds that 
they baHeve repubncans would 
like it They should be opposed 
to it because it is wrung and 
has been discredited.” 

fadwut nf afairHng n w i m-lte 

review after the murder of 
eight British soldiers near 
Omagh, County Tyrone, on 
Saturday and the murder of a 
naval recruiting officer on 
Monday, Mr Adams, the Gov- 
ernment should have carried 
out a fftHtiftai analysis of the 


The man killed on Monday 
was named yesterday as Lt 
Alan Shields, aged 45, from 
Ayrshire, the first naval officer 
murdered in Northern Ireland. 


Famborough 
prepares 
arena for 
‘propfan’ 

By hdctiael Donne, 

Aerospace Correspondent 

THE WORLD'S first airliner 
using the revolutionary "prop- 
fan” engine arrived at the 
Royal Aerospace Establish- 
ment at Famborough, west of; 
London, yeste rd ay . It wfll be 
shown there at the interna- 
tional air show from Septan- 
ber4 to U. 

The aircraft co m pri s es a US 
Mf-n«mv>i] Douglas MD-80 air- 
frame with one of its two con- 
ventional jet wn gjwwi replaced 
with a General Electric GE-36 






jg 




The XJEB airliner showing one of its finis 


it 

sively flight tested in the US 
fliia summer, at E d wa rds Air 
Force Base, California, this is 
tiie first time It has been flown 
outside the US. 

The aircraft arrived at Eom- 
boxoogh after a flight of more 
than 12 hours, ft flew in easy 
stages from Edwards Air Force 
Base, via Mfanaanw jliv. Gander 
(Newfoundland), and Eeflavlk 
(Iceland). 

It will stay in the UK for the 
next two to three weds. Spe- 
daHytovited airline executives 
win be given demonstration 
flights In the aircraft before it 
is shown to air-show v isit or s 
for the first time. 

After that the airmail may 
on to Western Europe 
r etu r n i n g to the US, for 


farther fftffl 1 * 1 testi n g 

The prop-fan harnesses a 
new type of propeller, shaped 
more like a ship's screw man 
conventional propellers, to a 


without a gear-box. 

The result, it is claimed, is a 
power-plant that not only is 
much quieter than conven- 
tional jet engines, but also 
offers lower pollution as well 
as savings of qp to 25 per cent 
in ftael consumption, while 
driving the aircraft at near jet 


all possible snags, they win 
launch the venture into quan- 
tity production. 

At that point, the atrcraft 
will be called the MD-91, 
designed to seat up to about 
100 passengers, for short- to 


Tb» ri rpaff B fl w at Barnhnr . 

ough is called a 


demonstrator", designed 
to flight-test the c 
frame combination, 
it has some seats in its passen- 
ger cabin, most of the space is 
gi ven ova- to flight-test mstru- 

When McDonnell Douglas 
and General Electric are both 
satisfied that they have cleared 


Both companies are now db- 
cussing their plana with the 
worid’s airlines. In an attempt 
to win launch orders, espe- 
cially from airlines seeking 
new types to replace their 
existing ageing fleets of 100- 
plns seaters, such as UK-boUt. 
BAC 1-llsand alder versions of 
the Boeing 787 and 727 airiin- 
ere. * 

Later tins year oar eariynext, 
fht> tama McDonnaQ Douglas 
airframe will be used to l^ight- 
test another prop-fan engine, 
the 578DX burnt by PW-Alfison, 
a joint company fanned by 
Pratt & Whitney and ATHwmn 
Division of General Motors, 
both of the US. 


The cost of shutting off disaster in the North Sea 

Max Wilkinson looks at possible remedies after the Piper Alpha accident 


E VER since the gas explo- 
sion that ripped apart 
the Piper Alpha plat- 
form in the North Sea last 
month leaving 167 people dead, 
the oil industry has been anx- 
iously wafting to discover the 
cost of the extra safety mea- 
sures it win have to put in 
place. Because the sum might 
be enormous, the industry has 
also debated intensively about 

Whut it ftwmito ii ftm. 

gfliic — unH sensible. 

Same of the more radical 
proposals, such as insisting 
that men and machinery are 
housed in separate living quar- 
ters, will doubtless depend on 
the nmart of the flail inquiry 
into the disaster, which may 
not be completed until late 
next yean 


However, the general ontUne 
Of what happened is now fidriy 
well known in the industry, 
and ministers are anxious to 
press ahead speedily with the 
more obvious remedies. This is 
expecte d to be the burden of an 

an n m nvwi iw if later <Ma nek, 

asking the oil industry to sub- 
mit proposals far fitting extra 
safety valves to gas lines at a 
cost of several hundred million 
pounds. 

. Whatever the initial cause of 
the Piper Alpha explosion, it is 
clear that the inferno was 
fanned by huge quantities of 
natural gas from one at the 
three pipefines connecting into 
the platform. 

To prevent such an accident, 
all natural gas pipelines are fit- 
ted with an automatic valve 


where they enter the lower 
deck of the platform. That 
should shut off the gas auto- 
matically in an e me rgency, or 
if electric power is lost But 
what happens if a valve sticks 
or is blown apart, as seems 
windy at Piper Alpha? 

In many of the larger North 
Sea platforms, there is no sec- 
ondary line of defence, and 
nothing to stop the gas con- 
tained in 20-50 kilometres of 
pipeline pouring into the 
breach. Eventually an operator 
on shore or on another plat- 
form would dose a valve, but 
tint would not prevent the gas 
already in the pipwWiw from 
fbeDing the fire. 

Such a danger has long been 
recognised hi the ell Industry, 
but until recently technology 


was not considered reliable 
enough to deal with it. The 
obvious answer would be to 
place a very large auto mat ic 
valve in the pipeline on the 
seabed. But valves some 400ft 
under water are almost impos- 
sible to maint ain and have 
proved er rati c. 

There is now a fierce debate 
within the industry whether 
the technology has become 
reliable enougnto allow fitting, 
cf underwater valves. Shell has* 
been testing such equipment 
with some success, out other 
operators Dear the valves could 
lead to expensive lasses of pro- 
duction if they Jammed shut 
and would be a safety haxard if 
they jammed open. 

The Department of Energy 
appears determined to acceler- 


ate the debate on the use of 
Hifa equipme n t. The nnJwMn 
valve can cost £3m-£4m to 
fcwfain in Mm*, not co unt - 
tog the cost of lost production 

during Bmi mnd U SftaHfm, 

could be a similar amount; at 
least in the deeps: waters of 
the northern North Sea. 

Although a few million 
pounds is by no means prohibi- 
tive for a North Sea operator 
even in theee straitened times, 
the cost for the whole s ector 
would be large. For SO to 40 gas 

valves to the northern and cen- 
tral sectors at perhaps Efim 
each the cost would be of the 

ostler of Mm* 

Even so, some industry 
experts say thataflarthehov- 
roreof the Pfoer Alpha disaster 
these measures would not be 


enough. That is because an 
undersea safety -valve would 
have to be shea some distance' 
from a ptatfonn, for an under- 
water rupture could be highly 
anywhere near a 


However, that means that if 
a fire started on the platform, a 
Dull kilometre of gas would be 
available to fuel fin fire even 
after the valve shut down. 

It Is partly because the 

faihnhy jg bHTI ^ahiHn y Wu> 
best solution, and partly 
iwwnM> an jdaUom a are dif- 
ferent, that the department's 
di re c tiv e is likely to ask for 
solutions rather than laying 
down re quirem ents. Ho wewa; 
the todortry knows that In the- 
end it is going to have to lay 
out a lot of money. 


Row over ‘class’ 
definition splits 
UK Communists 


By Tom Lynch 
GLASNOST, which strode tide 
year's Soviet Gfimiiiist Party 
arrived at 


the City 

ten 8? the party's 


A prase c on for me s to 1 pres- 
ent a policy dlscn ss ton paper 
was peppered with arguments 
between the hard-line and 
revUmist factions of the Brit- 
ish Communist Party. Even 
one of the Joarnsflstr Joined 
to. 

A reporter from fl»e Mornin g 
Star, the daily newspaper 
which is contnriled by a barrl- 
jipa faction which was 
expdki from the British Com- 
munist Party to 1S85, accused 
the document's authors of 
re writin g tiie definition of 

f flrfal ^1— ■- 

With Httie sadness, the 
re porter Infarewd tha w “You 
have got yet another serious 
Ideological- split on year 


Journalists were at one 
point treated to the spect ac le 
of Mr Gordon Mactennan, the 
party's general wnt te y, who 
benignly over the 
;’s launch and the 


sodate 

of the very paper he 


The dw-mnimrt Is bfilad as 
-the first stage In 
the party's p ra gt a s 

tiie BritishBoad to __ 

and the section dealing with 
does is bound to provoke, at 
the very least, a signi ficant 


B dUsudsose tiie ^ am- 
1st picture of a ruling 
wMch rente 


controls the: 
of production and which is 
ranged against a class of the 
waged, aigatag instead that a 
“swathe” of weaken now con- 
trolled a “productive asset" 
such as wu. and tint they 
were therefore in “contradic- 
tory class locations." 

tw, -was too in™Ti for the 
Morning Starts man, who did- 

iwt roi tin) definition of class. 

Ito provoked a roughly 
equal gpftt be twe en hard-Hnera 
imd revisionists among tiie six 
members of the eight-strong 
dzxitfcsg committee who ware, 
jpsjsenl. ■ ■ . . 

B else put Mr Metam umn In 
a d Uf i M lt postttan. His genial 
smile did not flicker as he sold 
he “would have to be no- 


ehmed about some rftiwfo^ 

mulattoas,” esgcri aBy K 
mtSwn bul been sug^s™ 

that f«nad worfcacs .w ge y 

ct Oe «* ■ 

VSk 

JeornaHst and 

stools t camp, ad mitted that 
definition was tofoej 
hut ®mm A that it toon 
ywH m t qf fee pci lfliel lesson s 
learnt over the prat 20 year*. 

However, Mr Monty Jobi* 
■tone, a bsr*Bw foe^ed 
it as “confined ana 

winkers had nevwr been writ- 

i 

■ni |fnt wri tiUSe who OMW 

the means of production. _ ; 

SadnrefleuptertOTW 

dres that the economic sectiA 
of the paver passed ataosr 
unremarked, although it 
acknowledges the ro le atm xr- 
kete and Includes pwpo«b 
o m h as the intr oduction of a 
wfai w wdi j ii stake for aQ 13* 
year-olds and the mi min g up 
wettonsaf state monopolies to 
competition. 

WhA Mr M m foim on made 
dear foot tim party would not 
be tofiaeaced by tiie Morotog 
Star any more than fly other 
“media commoatators,” the 
paper's representative was 
stung to respond that the 
paper overturn ed, rather than 
continued, the British Road 
traditions and issued Ms warn- 
tog of a split s'"'-" 

• iMi dahgmoius tedk unified 
tiw -comrades -even thosewho- 
disagreed with the doc ument 
sow it re forming Pmt of a 
heaUhy disomriow, a concept 

which is faiMflfar to stud Hits 
of fissfperous left-wing groupe 
hi Britain. 

Bor Mr Hackman, tte docu- 
ment carried forwar d the 
peactfa tea dtHi m of 


to Associate 
himself from Mr Hacftennan, 
Mr Johnstone insisted tint dls- 
comtou was hreltiiy and told 
the errant scribe: “The Idea, 
font It constitutes .a epUi is 
crepMabABlom 1 ' 

tladno Ujp to tAe Adam Pub- 
lished as insert to Marxism’ 
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I I i ll. 1 \' I ’ tw I* «» ■ >-• H vi M ».] III II r • j II I ‘ ) iJK 





M B' RICHARD Wake- 
ford, administrator at 
the connlry house of 
Knale, is taforiated by tiie lack 
of totawt .ffldifhftert by saaw 
tourists. One party of Ameri- 
cans emerged after four min- 
utes to the enormous house, 
only to he sternly told to 
return and "look around 
erly." When they 
flntohwl they were so 
astlc about Knole that they, 
and their chauffeur. Joined the 
National Trust on the spot. 

Time is important at Knofe 
The house, so the story goes, 
was hunt with a temporal har- 
mony. This dictated that it had 
seven courtyards, one fax each 
day of the week, 52 s t ai r cases, 
for every week to the year and 
385 roams, for each day of the 
year. 

The ahoy is frobatdy apocry- 
phaL like most of the great 
English co untry booses , Khola 
was buflt over several centu- 
ries from the 1400s, not to one 
grand design. Thera axe cer- 
tainly seven courtyards. But 
the rooms and staircases have 
never been counted because 
there are so many and because 
no core wants to qpaO. tire story. 

However grand its begin- 
nings, Knole has had to live in 
recent years with the reality of 
running at a kiss because of 
tiie sheer scale of the property 
«nd the crippling cod of its 


mmmmm 

[ - ' .u+* •: 





1 • '“'I 


but ready half tiw trees were 
damaged . The debris should he 
cleared by the end of the 
but the task of : 
trees will take decades. 

Repairs apart, Knole cost 
£338400 to staff; light and heat 
last year. The Trust employs 
three ffnH-thm* nfHrta lw. IimiM 
by Mr Wakeflard as a dmtnlat ra- 
tor, and tioee part-time secre- 
taries. Other staff ore taken an 
for tire summer season. Knole 
also xeDee on 250 vuh mt eera, 
mostly local membera of the 
Trtist, to act as guides: answer- 
ing questions and stopping 
way ward children from leaving 
* on tiw mar- 


ia a sprawling mass of tow- 
ers and turrets built of 
and red stone in a vast 
park on the outskirts of Seven- 
oaks in Kent It Looks, as Vir- 
ginia Woolf wro te in her novel 
Orlando, like “a town rather 
than a house, hut a town 
bum .. .by a single architect 
with one idea to his head." For 
350 years Knole was the 
serve of the Sackville 
Now, like so many other am»i- 
tzal homes, ft is owned and nm 
by the National Trust, the 
rhflritaWe organisation which 
administers a large w n wiiwr of 
historic buildings and 
stretches of beautiful country- 
side. 

The house Is now open to tiie 
pttbHc. The family has 
itfreated to the north and 
south wings. Tbs deer graze 
_ _ txed camj with their 
fawns. Sightseers swarm past 
tiie Reynolds po rtra i ts In the 
Crimson Drawing Room. 

Knole is spared the coach- 
loads of to urists that throng 
more monumental booses such 
as Ch ate w or th or Blenheim. Bg 
attractions -a collection of 
17th-century furniture and . 
tramps Total frescos -are of 
more esoteric appeal. 

The house tends to attract 
amateur historians in aansibte' 
sandals or else bookish adofea- 


Most of Kudo's income - 
£158,400 in 1987 -comes from 
the e nt rance fees charged to 
visitors. The rest comes from 
the income an the endowment 
given by the Sackvffles when 
the Trust took Over the prop- 
as we ll as grants and 
ate from the souvenir shop. 
Wekefocd hopes to open a 
tea room to generate more 
income in the future. 

Last year tire Trust provided 
£174,000 to make m> the bal- 
ance on Knole’s dafirft- Some 
Trust properties, such as Char- 
twelL jance ti ie home of Wto- 
■aton ChurefaflL attract so many 
visitors that they are profit- 
able. Knole has a respectable 
num ber of visitors -89^)00 last 
T-but has always run at a 


Knole: town rather titan a house," Woolf wrote 


cents, moved by Virginia 
Woolfs love for Vna SackvlQe- 
West, the inspiration for 
Gdando and «» of the most 
ibmWwg of the SndcnDo. 

The Trosttook orerKnote in 
1947. The family made over the 
house, its contents and part of 
the. park- en a 200-year lease/ 
The Sackvffles pay a pepper 
com rent for. flute apartments. 

lor 1 flbe ifrtyHfih up per, clas- 
ses, the post-war years -were 
marked by rising costs, ^rirall- 
ing taxation and a shortage of 
B cr ynfai Many ftwfflst found ' 
it increasingly ^ttfficult to ding 
on to their ancestral homes. 
The Trust took aver & great 
many historic houses to pro- , 
serve the bufidhigs and save 
their art coBecthms from the 
anctfon rooms. 

Knole is one of ISO proper-' 
ties -ranging from castles to 
cotiages-opeiied by .tiie ^rust- 
totfaepubnc.Inl947, when the 
Trust took over Knole, the 
property^ body needed rauuvte- 


tion. Materiala and workers 
were available for only the 
most urgent repoira during the 
Second Worid War. The sfidoe- 
wprir was crumbUng, the roof 
damaged and there were 
of damp and rot 
: tire home. 

In the early 1900s tiie Trust 
began a oostiy, 25-pear zezwva- 
tton scheme. As an indication 
of the scale of the" task, fiuh ' 
are' four acres of roof atKnote.'. 
One mason spent almost 2fi 
years restoring , the ^ stanewotk 


- A record lOQjOOO vis itor s saw 
tiie house in 1976, only for 
attendance to fell in the late 
1970s and rise again In the 
early 1980s. This year the num- 
bers have fallen, possibly 

hecanse of the dearth of Ameri- 
can tourists, deterred by the 
weakness of the dollar; or per- 
nogs purely because of thfa 
sm i mipr 'a dismal weather. 

The most diligent visitors 
axnro when the house opens 
and have when it doses. The 
lerai afUgeut race around with 


hr one man who was in and 
o nt to minutes, a record to 
bifo lia t e Mr Wakeford. 


- The renovation was com- 
pleted four years ago. But the 
cost nf WHtnbrmtny fl y . 

Is dfi 1 cripplingiy bi^L .Laist 
year theTrust. spent almost 
£190,000 on repairs, chiefly, on 
chi mn ey s .' 

This year's priority is the 
park, which was devastated by 
the storm that struck southern 
England last autumn. The 
boon emerged unscathed, the 


raurou, UBTUmim 

keeper, patrols the gatesto 

undesirables. 

occa s i ona lly gffp thnnuch. a 
group of West. Germans wan 
oncejound frolicking in the 
SaAvIBe tf pri vate swinanlng 
nooL-Arri. ttwiw i ti omw . . .. I-i!" 


time to thm 

MfeSISg 

™ pot tack aaStafSK 


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[ ... 


FINANCIAL TIMES WEDNESDAY AUGUST 24 1988 


UK NEWS 


GDP increase reinforces fears over inflation 


Economy pace accelerates further 


By Ralph Atkins, Economics Staff 


BRITAIN'S ECONOMY 
continued to grow at an excep- 
tional pace into the three 
months to June, according to 
official figures yesterday. 

Central Statistical Office pre- 
liminary estimates showed 
gross domestic product 
Increased by 1£ per cent in the 
April to June period. Com- 
pared with the same three 
months a year before, it was 
5.1 per cent higher. 

The figures, based on the 
output measure of GDP, show 
little change in the 
growth rate compared with 
revised figures for the first 
three months' of the year. How- 
ever, the annual g rowt h rate 
was slower at the ami of 

1987. 

The buoyancy of activity 
reinforced fens that the econ- 
omy is growing too rapidly and 
to inflation. Most City 


meat Secretary, said the foil In 
the 33 eo«tiw to July was the 
largest annual decline on, 
record. 


The flames show the num- 
ber. of unemployed, for more 
than six months in July 
totaHed 1.88m - 2 15 par cent 
lower than the same month a 


of London analysts believe the 
Government wffl have to raise 
base rates soon -possibly to 
more than 12 per cent - to 
reduce growth- to a more sus- 
tainable rate. 

Other figures released yes- 
terday show a Mg drop in UK 
long-term unemployment in 
July — again hi ghlighting the 
strength of economic growth. 
The number rfwtmtwg hwrwut 
for more than ayear fell below 
lm for. the first time in five 
years to 948,000. 

Mr Norman Fowler, Employ- 


The number without jobs for 
five years or more was 288JJ00 
. in July, 14000 less than the 
same time last year. 

In flwpiri*! markets, the 
GDP figures were poorly 
received. Trade was nervous 
largely in anticipation of 
tomorrows UK trade figures 
which are' widely expected to 
show a current account deficit 
of at least £lbn. 

BariifT share pr i on * fo tfo in 
Tokyo and New York further 
upset equities. The FT-SE 100 
share index dosed down 144 at 
1817.9. Gilt-edged securities 
also ended lower. 

Fears about tim trade figures 
are likely to be intensified as 
■analysts scrutinise the GSO’s 
annual digest of figures for the 
UK balance erf payments 
released today. This shows last 
trade d£fidt inlB87 has 
. revised up from the previ- 
ous estimate of £L6bn to 
Ifcfihn. 



constraints on output," he 
said. 

In the year to the last three 
months of 1987. the . output 
measure suggests the economy 
grewby nearly 5% per cent per 
cent The average of all three 
measures shows growth of 
about 4% per cent 


In the three months to June, 
the latest estimates suggest 
growth was spread across most 
sectors of the economy apart 
from oil production which 
showed a Am-Htw co mpar ed to 
ayear before. 


Figures for non-oil GDP, 
dhow economic activity was 5j6 
p mit Mgter -than the «mw 
a year before. 


Norman Fowler: largest drop 
in long-term Jobless 


most reliable Indicator of 
short-term movements. 


Mr Bill Martin, chief UK 
economist at Phillips & Drew, 
said the growth rate in the first 
six months of this year was 
less than in the second half of 
1987. However, this did not nec- 
essarily mean overheating 
pressures had subsided. 


The CSO said a ctivity was 

p ar H fU lq rjy «ftrr mg hi manufac- 
turing and construction sec- 
tors. In service industries, out- 
put in the three months to 
June was L7 per cent higher 
than the previous three 
months and 5£ per cent higher 
than the same period a year 
before. 


K 


Yeste r day ’ s output baaed fig- 
ures are one of three measures 
used by the CSO to show GDP 
growth but are considered the 


This could be the slowdown 
in demand that we have been 
waiting for. Or, more omi- 
nously, it could reflect capacity 


In London yesterday, the 
onnd weakened against 
Hark to end at DM3.2025 
compared with DM32175 at the 
previous close. Against the dol- 
lar it ended at 4L8795 against 
3L6765. 

The Bank of England’s ster- 
ling index fell 0^ paints to end 
at 78J. The FT Ordinary huimt 
dropped 111 to 14660. 


Trade deficit revised upwards to £2.5bn 


By Sknoa HoBtorton, Economics Staff 


BRITAIN’S trade deficit in 1987 
has been revised .towards to 

« 9 flin from VI dm. 

to official figures 
today. 

The Central Statistical Office 
says in its annual digest of fig- 
ures fear the UK balance of pay- 
ments. known as the Pink 
Book, that the currant account 
deficit was revised upwards 
because of a lower level on 
reoepits from services together 
with a higher level of imports 
than first thought. 

The revisions to the trade 
figures are EkMy .to unsettle 
UK financial markets which 
are already tense ahead of the 
release , tomorrow of bade fig- 
ures for July. Inependent econ- 


omists expect the deficit for 
this year to rise by £Um in 
July. 


The CSO said tomorrow's 
trade figures would show that 
the wnT Mi t wrm n nt deficit for 
the lint three Hwwiflm of the 
year wre estimated to be £UIQm 
greater, or £&9bn. This was 
tan increase of £900m in 
esparto. 

The CSO said that the deficit 
on visible bade in semi-man- 
factored and manufactured 
good widened to £7Abn in 1987 
from£5.7bn in 1988. The sm> 
ph» cm trade in ofi was t423m, 
slightly higher than in 1988, 
.but neariyhalf that of 1986. 

The figures Mao show that 


the crash in worid share prices 
in October last year, generally 
lower share prices, and a stron- 
ger pound had the result of 
reducing Britain's net assets 
abroad. 

In 1987 net assets were val- 
ued at £89«ftm, compared with 
£I132bn in 1986 and £8(Uttm in 
1985. 

Last year there was a net 
disin vestment of ffiJflmbyUK 
investors in equities and bonds 
compared with purchases of 
fiOm in 1968. Foreign invest-' 
ment in British shares and 
hands rose by £UMflm com- 
pered with an Increase of 
88 u4hn in 1986. .. . 

Earnings on UK investment 
abroad totalled £18Jhn in 1987, 


of which direct In vestments 
accounted for £10.7bn and 
investment in equities and 
bonds came to £S.5bn. This 
compared with £l&5fan in 1986. 

Last year, UK direct invest- 
ment in industry and services 
was £15.4bn, compared with 
£LL5bn in 1986. Overseas 
investment in the UK was also 
higher at £6hn co mp ared with 
£42hnin 1986. 


The CSO estimated that the* 
value of UK direct inv e stm ent 
abroad was £ 9Mhn; tie value 
of foreign i nv e stm ent in the 
UK was £5&4hn. 

United Kingdom Balance of 
Payments, 1988 EcBtkm, CSO. 
Available from: HMSQ. £9S5. 


Investors in 


Barlow 
Clowes may 
see higher 
payout 


ByCUva Wofanan 


THE 11JXX) inv e stors in Bartow 
Clowes International can 
expect to receive much more 
than 50 per cent of the money 
that they have paid into the 
offshore fond which has now 
been put into liquidation. 

A breakdown and valuation 
Of t hfi and ^brfrruf qf P CI , 

on a best estimate basis rather 
than following the much more 
conservative and pessimistic 
approach adapted by the liqui- 
dators, suggests that they will 
realise between £60m-£85m. 

This does not include the 
possibility that investors will 
recover additional sums from 
negligence suits against the 
Trade and Industry Depart- 
ment, financial advisers and 

te fcp rmiMWflHBH, amHtliig firms 
Of hanlcs. 

Shortly after the Barlow 
Clowes companies were put 
into liquidation in June, the 
liquidators suggested that less 
than £40m of the Bd assets 
may be recoverable. 

The money invested in the 
Gibraltar-based BCI fund is 
thunght to have been slightly 
over £100m, although the 
raffing up within the ftmfl of 
the inflate d rates of Interest 
that Bd was offering its cli- 
ents has boosted its potential 

HflMHHflg tO about CIJWwi- 

The less gloomy picture fol- 
lows an upgrading in the valu- 
ation of a variety of differen t 
assets. Many of these are loans 
-to companies which have 
become insolvent but which 
nevertheless have enough to 
allow creditors to retrieve most 
of their money. 

One key figure is the amount 
of BCI money tied up in the 
James Ferguson industrial 
bolding company to which BCI 
indirectly made a £31m loan. It 
also has a direct stake of 60 per 
cent of its share and, 

through the assets of Mr 
Clowes which have been 
assigned to it, an further indi- 
rect stake of 25 per cent. At 
one stage these stakes were 
valued by the stock market at 
more than £50m. 


Mr Tony Richmond, an Insol- 
vency partner of Peat Marwick 
McLintock, the administrators 
of James Ferguson, yesterday 
laid to rest fears that the com- 
pany may be insolvent. 


Statoil to open negotiations 
on gas sales to 


By Karen Fossil In Oslo and Max Wilkinson fn London 


STATOIL. Norway’s state oil 
company, said yesterday that it 
is to start negotiations with 
British Gas in October for the 
aimnai de l i ve ry of 5bn ftnhfo 
metres (ban) af Norwegian gas 
to the UK. 

The negotiations will re-open 
a priiHioai argument in London 
on whether British fias s ho uld 
be given an import licence. 

After the UK Government's 
decision three years ago to 
veto a $30bn contract for the 
import of gas from Norway's 
SLetpner field, the Department 


of Energy has taken a strongly 
protectionist stand. 

However, Mr Cecil Parkin- 
son, the present energy secre- 
tary , and a free trader by tem- 
perament. might well be 
sympathetic to a more moder- 
ate scale of imports. 

At a meeting in Oslo last 
month Statoil Br it ish Gas 
decided to pitch the quantity 
for negotiation at between 5 
bem and 8 bem or 10 to 15 per 
cent of the corporation's pres- 


ent requirements. Imports 
would start in the mid 1990s. 

However, a great deal of 
negotiation will be needed in 
the political as well as in the 
commercial arena before a firm 
contract can be signed. 

Last night Ur J ames All- 
cock, British Gas’s director of 
petroleum purchasing, con- 
firmed that tafleft with Statoil 
were to take place, but said the 
company was trimul taneou sty 
talking to other possible sup- 
pliers of imports, including 
Algeria and Nigeria. 

However, the company does 
not appear to be talking to the 
Soviet Union, which has huge 
gas reserves and a large 
amount erf spare capacity in its 
pipeline to Europe. 

Some analysts regard the 
British Gas's talks with Nor- 
way as being partly a tactic to 
drive down prices in the UK 
sector. For some years it has 
also wanted to secure addi- 
tional supplies to meet a poten- 
tial gap between supplies and 


demand In the late 1990s. 

'Hie Sleipner deal foundered 
on the UK Government’s fear 
that large scale gas imports 
would thre aten the develop- 
ment of the UK's gas reserves. 


That fear may still yet pro- 
vafL At an offshore petroleum 
conference in the Norwegian 
west coast city of Stavanger, 
Mr Peter Morrison, the energy 
minister, said yesterday that 
he was prepared to ensure that 
the development of gas ora the 
UK shelf will go ahead to sup- 
ply gas into the 1990s. 

British Gas’s interest In 
imports intensified when it 
appeared that reserves in Nor- 
way's Frigg field, from which it 
obtains about a quarter of Its 
supplies, were some 50bcm less 
than expected. 

However, Elf Aquitaine, the 
Operator of the Frigg field is 
seeking to tap reserves which 
it beleives may lie in different 
levels the reservoir. 


Cash needs. Page 17 


Taylor Woodrow plans 
property certificates 


By Nfldd Tail 


TAYLOR WOODROW, the 
construction and property 
group, said yester da y that it 
planned to start realising prof- 
its on its St Katherine’ s Dock 
develo pment in London’s Dock- 
lands through a pioneering 
issue of property income certif- 
icates (pines). 

If the market develops, we 
see ourselves as long-term 
players,’’ said chairman Sir 
Frank Gibb. 

Pines are a mong the afagto 
property asset Investment 
vehicles which are presently 
under development. The certifi- 
cates will entitle their owners 
to an or part of the rental reve- 
nue of a building and a share 
in the wnmagwiiMit company. 
The underlying ownership of 
the building itself, however, 
wffi not change. 

Tim opening of a market in 
pupa pends ™ publication at 
regulations from the Depart- 
ment of Trade and Industry. 
These are expected within the 
next few weeks. Taylor Wood- 
row said, however, that it 
hoped the market would be 
within six months. It 
to make an issue in. 


the first batch of certificates as 
soon as this year. It is one of 
the first companies to expres s 
a firm interest in the market 

The planned issue would 
relate to part of the rental 
income on just one of the 10 
buildings comprising the St 
Katherine’s Dock development 
Taylor Woodrow said that it 
was considering a couple of 
possibilities, but declined to 
say how much it expected to 
raise through the issue. 

St Katherine’s Dock, which 
has been under development 
for well over a decade and is 
BtSl not complete, accounts for 
about half of Taylor Woodrow's 
UK investment property portfo- 
lio. At the end of 1987, UK 
investment properties were 
valued at £400m, out of the 
total £521 Hi portfolio. 

Yesterday, Taylor Wood- 


row -where Sir Jeffrey Ster- 
and Oriental 


ling’s Peninsular 
Steam Navigation (P&O) 
recently acquired an 8L5 per 
cent stake -unveiled interim 
profits up from to £34m 
before tax. 


Lex, Pago 14 


Shipbuilders to 
lay off 1,000 
in Sunderland 


By Kevin Brown, 
Transport Correspondent 


BRITISH Shipbuilders is to lay 
off around 45 per cent of the 
workforce at its threatened 
North East Shipbuilders sub- 
sidiary in Sunderland. 

It slid lay-offs would begin 
immediately and continue 
Twitfi fim will of next month, 
when around 1,000 workers 
will have been sent home on 75 
per cent erf basic pay. 

There was relief in Sunder- 
land that redundancies had 
been avoided. But it emerged 
that British Shipbuilders opted 
for lay-offs only after last-min- 
ute Government pressure. 

The corporation bad 
intended to make the men 
redundant until late on Mon- 
day evening. The decision was 
changed after Mr Tony New- 
torn the Industry Minister. 
madti it clear that he wanted 
all 2,250 jobs at North East 
Shipbuilders to 6e maintain^ 
for the next few weeks. 

Mr Newton is understood to 
be keen to demonstrate that 
the Government is willing to 
do everything possible to keep 
NESL intact while a private 
sector buyer is identified. 



iicnsffr 

Euwasi 


turkeys merchant bank 



Au eacating contract in a new country. 
Q^xatunity knocks. 

Butwidiout the right advice it could all 
gO horribly wrong. 

IktisatBankasiisT 

merchanrbank. In trade finance, in project 


ive 


business in Turkey we 
can, meet all your needs. 

For further information contact 
Arthur Wilkinson on (901) 174 1111. Or write 
to Iktisat Bankas, Buyukdere Cad. 165, Esentepe, 
Istanbul, Turkey. Telex26021. Fax (901) 174 7028. 

You’ll be surprised what we can do For you. 






-- . 


\ 




FINANCIAL TIMES WEDNESDAY 


AUGUST 2* 1*8* 


JOBS 


Why careless talk could endanger skills 


By Michael Dixon 


"OLD Mrs Huston was terribly 
cut up after her daughter died 
on the operating table,” 
announced a woman at the 
afternoon coffee party. Her 
adult companions responded 
with sad nods and murmurs of 
sympathy. 

But the remark bad a very 
different impact on the child 
who grew up to be the author 
James Thurber. He wrote later 
that what the woman had said 
kept him lying awake at night 
for weeks, imagining the 
gruesome scene. 

He pictured old Mrs Huston 
sitting in the operating theatre. 
Then he saw the surgeons 
taming on her with scalpels 
flashing - after they had 
finished with her daughter, of 
course - and saying! “Now 
Mrs Huston, are we going to 
jump up on the operating table 
by ourselves like a good girl, or 
we have to be put there?” 

That tale shows how things 
most people say with scant 
heed to their literal meaning 
can worry someone acutely 
sensitive to words. And those 
who work with words, such as 
the Jobs column, tend to have 
an above-average sensitivity to 
them although not (alas) to 
anything like the sublime 
degree possessed by Thurber. 

Hence my puzzlement, albeit 
mild by his standards, over a 
certain word which people are 
using more and more when 
discussing work topics. At one 
time its use in that contest 


seemed confined to the City of 
London and. being Inured to 
the barbarous language spoken 
there, 1 wasn't much withered. 
But the other evening 1 was 
alarmed to hear the word used 
by the chief of a provincial 
manufacturing concern. 

“We had a recruiting drive 
lately ” he declared “and I'm 
glad to say we’ve managed to 
take on a lot of good players.” 

When 1 asked him what it 
was they played, he looked at 
me uneasily and said be must 
move on. Which he did, leaving 
me alone to wonder why he 
and growing numbers of others 
should speak of “players” 
when referring specifically to 
“workers”. 

One possible reason is that 
those who do so are unaware 
that the two terms don’t mean 
the same thing. For instance, 
they might all have been 
brought up as members of the 
Yir Yoront tribe of Australian 
aboriginals whose language 
does not enable any distinction 
to be made between work and 
play as activities. It hardly 
seems likely, though. 

Another possibility is that 
“players" is used, as it once 
was in cricketing circles, to 
denote workers who insist on 
being paid for their efforts as 
opposed to “gentlemen" above 
such pecuniary gain. In the 
City of London if nowhere else, 
certain folk still wear some of 
the hallmar ks of gentlemen, 
including a signet ring on the 


left little finger and a suit 
which looks as though it has 
just been mown. 

While they could perhaps 
afford to work for love alone, 
however, none of them seems 
willing to do a hand’s turn 
without a company car and 
cheap mortgage on top of a 
vulgarly large sum of money. 
So the explanation of the odd 
use of language must lie in 
some other context. 

The one that seems most 
probable - and which raises 
disturbing implications - is 
gambling . After all, “playing” 
in the sense is surely a 

pretty apt term for the primary 
function of the finance sector. 
But if the idea spread around 
that the same constitutes the 
central activity of other parts 
of the economy, there could be 
dire effects on the development 
of other kinds of working skills 
which lie at the heart of most 
advances in well-being that 
humankind has achieved. 

For the work of making 
thing s and providing the bulk 
of services useful to people 
cfc-iHa markedly different 
from those of risking money, 
no matter how successfully. 

Otherwise, there would be 
little point in the British 
Government’s plan to improve 
young people’s education by 
focusing their attention on 
Intellectually demanding 
studies. It would be better to 
model education on the Oxford 
University of 150 years ago. 


which was probably the best 
training ground for “players'* 
ever to exist Undergraduates 
typically spumed all scholarly 
study in favour of gambling 
interspersed with huntin’, 
shoo tin’, and fishin’. 

That is not to say the skills 
they acquired were socially 
worthless or bereft of mental 
rigour. For instance, sustained 
success at the gaming tables 
needs a mathematical ability 
that few people possess, and 
which is required in still 
greater measure in City-type 
trading. 

Nevertheless - as I learned 
from watching an electronics 

engineer wor king spare-time as 

a settler in a crowded betting 
shop - it is not the same kind 
of maths sfcfl] that is essential 
to innovative technology and 
science. He didn't get much 
money for his Saturday stints, 
he said. He just enjoyed the 
figuring which, compared with 
the demands of his regular 
design job, was very relaxing. 

The trouble is that, in 
Britain at least, a good many 
holders of high places seem 
blind to such key differences. 
Half a dozen times lately I 
have heard top people, three of 
them economists, welcome 
redundancies in the finance 
sector on grounds that they 
will force “clever" City people 
to “go and run industry”. 

Those who actually ran it, 

like the TnBTmfar t i irm g r.hiftf I 

met the other night, would 


probably not make the same 
vacuous mistake, hi re fe r rin g 
to bis staff as “players" be was 
merely using a trendy wont 
without thinking much about 
it, which is something aH of ns 
are guilty of repeatedly. 

Even so, as George Orwell 
said: “...the slovenliness of our 
language makes it easier for us 


to have foolish thoughts.” And 
loose talk by someone In a 
position of leadership makes it 
easy for other folk to have 
them too. So top industrialists 
especially would do well to call 
a worker “a worker*. Besides, 
they are the people who will be 
most terribly cut up if industry 
dies on the gaming table. 


Ups and downs in City 


ANY “players” in today’s 
congregation might find 
Interest in the table below. 
Based on figures from the 
Jonathan Wren recruitment 

consultancy, it shows the ' 
average changes in salary * 
achieved by City of London 
staff who moved jobs with 
Wren’s help between. March l 
and July 15. 

Job title 

Compliance manager 
Lending officer 
Assistant branch manager 
Private-client hanker 
O & M exe cuti v e 
Legal officer 
Financial 

UK landing manager 
Credit analysis manager 
Equity trader 
Senior lending officer 
Bond sales/traders 
Assistant fond manager 
Investment traders 
AH job-changers, March 1 to 
ALL back-office staff + 13.4 


The detailed data is limited 
to types of staff with average 
salaries of at least £25,000. 
But the bottom two lines 
refer to all ranks- 
The general picture is that, 
while no work category has 
escaped cuts since Black 
Monday, there is a fair 
demand for most types of 
staff seen as top performers. 


Type of work 
Back office 
Front line . 
Front line 
Front line 
Back office 
Back office 
Back office 
Front line 
Front line 
Front line 
Front line 
Front tine 
Front firm 
Front line 
July 15 1988 
All front-line 


% change 
+- 40.6 
+ 259 
+ 2L1 
+ 209 
+ 179 
+ 15.0 
+ 143 
+ 13.0 
+ 83 
+ S3 
+ 29 

- 23 

- 63 

- 6.7 
+ 123 
+ 93 


I Senior 

Sales 

UK Equities 

A number of leading houses are currently 
strengthening their UK sales desks and 
seek generalist salesmen with at least four 
years experience gained within a 

recognised house. 

A proven track record and the enthusiasm 
to succeed in this increasingly competitive 
market are essential. 

If you are interested in pursuing these 
opportunities please contact 

Charles Ritchie on 01-404 5751 

(01-675 0670 evening or weekends) or 
write to him at Michael Page City, 
39-41 Parker Street, 

London WC2B 5LH. 


I M 

Internal 
London F 


Michael Page City 

International Recruitment Consultants 
London Paris Amsterdam Brussels Sydney 


ty 

uhants 
i Sydney 


SENIOR CORPORATE 

BANKING MANAGER 


.tab 


TSB Scotland has an enviable position in 
corporate banking. This has been achieved 
in a highly competitive and dynamic market 
environment through innovative marketing 
of a wide range of services and products. 

We now have an exceptional opportunity for 
a professional business development 
executive who. reporting to the Assistant 
General Manager— Corporate Banking, will 
lead and motivate a team of executives in 
the development of the Bank's industrial/ 
commercial banking business. 

\bu should be a graduate and/or hold a 
banking or relevant professional qualifi- 
cation and have experience in corporate 
financial business development Aged in 
your 30's, you should have a thorough 
understanding of credit analysis and 


proven team leadership skills. The person 
appointed will contribute to budgeting 
and the setting of the department’s targets 
and be responsible for their achievement 

Salary will be commensurate with 
experience and is unlikely to be a barrier 
to the appointment of the right candidate. 
Candidates currently earning less than 
£20.000 are unlikely Id have the depth of 
experience we are looking for. Benefits are 
those associated with a major banking 
group and include a can Assistance will be 
given with relocation where appropriate. 

Please write with CV to: 

Alan Scott. Head of Personnel, 

TSB Scotland pic.. Head Office. 

PO Box 177. Henry Duncan House, 

120 George Street, Edinburgh EH24TS. 



The Bank of Bermuda Limited 

0tt»n»rw‘d k Btrawta fai UNI . 

TRUST OPPORTUNITIES 
1 BERMUDA 

The Bank of Bermuda Limited is an international banking, trust and investment management organisation with assets 
of S4 billion and 1,500 staff in 8 locations worldwide. 

Due to exceptional growth in our personal trust business we are looking for exceptional people to join us in Bermuda. 

— Assistant Manager - 

This individual will assume responsibility for the daily activities of a group of trust administrators and assist in the 
development of new business. Interested candidates should possess a university degree or professional qualification in 
the trust area, extensive technical knowledge of trusts, and excellent managerial and business development skills. 

- Administrator - 

This is an excellent opportunity for a career oriented individual to further develop expertise as a specialist in offshore 
trusts and companies. Applicants should - have at least 3 years experience in offshore trust administration and be 
making steady progress in the examinations of the Chartered Institute' of Bankers (Trustee Diploma) or a similar 
qualification. - - , • 

The Bank of Bermuda Limited offers an attractive tax free salary; generous settling-in allowance, relocation expenses 
and benefits package phis the opportunity to enjoy- Bermuda’s unique climate and lifestyle. ' " : 

Interviews wall be held locally In London between August 29th and September 9th. Applicants should telephone Mrs 
Nea Roloff at Bermuda 010! 809 295 4000 extension 3320 dr transmit their av. by facsimile to her attention at 0101 
809 292 3814 no later than August 29th 1988. 5 


I Corporate I 
Banking 

Two exciting opportunities exist for young bankers to join a successful and expanding 
department in one of London’s mayor AAA rated international banks. 

Property Financier 

You will join a small and highly professional team leading major financings both in 
and out ofLondon. The bank seeks to make maximum use of a large balance &eet and 
is committed to maintaining a significant presence in real estate. You will have 
developed a sound understanding of the workings of property finance and the current 
market. 

UK Corporate Marketer 

You will work in an established department covering major names from the UK Top 
500. The bank is able to offer a wide range of services including both capital markets 
and traditional credit-based products. You will also have the opportunity to work cm 
specialist financings including MHO’S. 

Candidates for both roles will be aged 25-30 and will have benefitted from a thorough 
training in credit and cashflow analysis. They will have at least 2-3 years' relevant 
experience and will have gained the maturity and confidence needed to conduct 
transactions and lead negotiations on behalf of the bank and its clients. 

The bank can offer an attractive salary and benefits package to the right candidates 
and can promise a varied, yet secure, career with good prospects of promotion. In 
return they will look for enthusiasm, innovation, d e dication and, above all, a flexible 
a pp roach to corporate banking. 

Interested applicants should contact the retained consultant, Mark Hartshorne 
on 01-404 5751 or write to him at Michael Page City, 39-41 Parker Streep 
London WC2B5LH. 


I_ 


Michael Rage City 

International Recruitment Consultants 
London Paris Amsterdam Brussels Sydney 


AT A CAREER 
CROSSROADS? 

Il takes a very special person !o 
reach Ibc lop in one field only is do 
bclier elsewhere but that is just Ihc 
ton of person Hill Samuel Invest- 
ment Services » row looting for. 

ir you have wceesrfufly dealt wilh 
people and finance in the pad, and 
are now seeking a new start wilh the 
chance or unlimited earnings (includ- 
ing office fadltuet) at your own boss, 
then please contact: 

Joyce PoW, HO Samel breotmeat 
Services, 3rd Flow, 1 Maddox Street. 
London WIR 9WA. Teh 01-034 4583 


REGISTERED 

REPRESENTATIVES 

Top Commission Plus — 
For Effective Individuals 
with Clients 
Highly Successful (Full) 
Members of TSA 

01-895-1700 Mr Hershon. 


VENTURE CAPITAL - 
EUROPEAN RESEARCH 
Emrepieneunar? EurophOeT Research 
background? Then you have a unique 
opportunity lo join an ambitious 
sian -up inlonnauan company. 
CaDio now on 01420 0802 or 
01 -73S WIM. or lend jrour cv today 
to Initiative Europe. 5.13 Boodvny 
Brumes* Centre, 71 Bondmy, 
London SWS iSQ 




Investment Administration Manager 

Woking, Sumy 

The Crown Financial Management Group has a consistent and impressive 
growth record that places us in the forefront of the financial services 
revolution. In short, we're setting the pace in a voy competitive and fast 
growing industry. 

We are looking for an Investment Administration Manager to fill a key 
position covering all administrative functions in our developing and 
expanding Investment Division. . . 

A significant dimension of the job will be the further development of our 
computing capabilities. 

This is a challenging role which would suit either an experienced manager 
or younger professional seeking to develop his/her career. 

You should be educated to at least 'A' level standard and be an excellent 
motivator and communicator. You should also have a sound background 
in Life and Pensions business with at least 5 years at management level in 
Investment Administration. 

To indicate the importance of this role within the Grotro, an extremely 
generous salary will be paid together with substantial fringe benefits which 
indude private healthcare, mortgage assistance and relocation where 
ap pr o pri ate. 

Please telephone or write with full CV to: | j~~ = ~ >i 

Julia Skyrme, Personnel Department 

ClOWn Financial Managem ent Ltd., 

Crown House, Crown Square, Woking, 

Surrey GU211XW. Telephone: 04862 5033 





'ft 


1 FINANCIAL 
MANAGEMENT 


J 


MKTG OFFICER 
— PROPERTY 

As a result of planned expansion in respect 
of business generated tn London, an 
established European bank seek to 
appoint a high calibre person for a major 
marketing function. The requirement Is to 
establish and subsequently control a new 
Commercial Property . section; 
necessitating extensive knowledge of the 
industry gained within a - banking 
background, together with effective 
management skills. 

Salary c£50, 000 4 comprehensive 
benefits package 


GORDON BROWN & ASSOCIATES UHL 
RECRUITMENT CONSULTANTS 



SENIOR 

MARKETING 

A European Bank of high reputation, 
especially active in London and currently 
undertaking further expansion, 
accordingly seek to strengthen the existing 
team. The position offers a challenging 
role to a well qualified commercial lending 
banker aged 30-35 with experience of 
generalist U.K. corporate business and 
also carries considerable responsibility 
requiring a relevant and appropriate 
background linked to areas of current 
participation. 

Salary c£30, 000 + benefits 
Including car 


57/59 LONDON WALL, LONDON EC2M SIP 
TEL: 01-628 7801 



INTERNATIONAL PRIMARY MARKETS 
INTERNATIONAL BOND ORIGINATION 
We are expanding our International Bond Origination 
Team and are looking for two experienced market 
professio n als with the ability to win Bond mandates. 
A proven track record is essential. Applicants should 
have 2/3 years experience and a thorough knowledge 
of capital markets products, particularly swaps»excellear 
analytical skills and creative ability, and an in-depth 
ability to structure market transactions. 

A competitive ranuneration package will be available ro 
successful applicants. Applicants should apply in writing 
with curriculum vitae to:- Mark Godson, Personnel 
Director Barclays de Zoete Wedd Limited, PO Box 188, 
2 Swan Lane^ London EC4R 3TS, or direct to Neil 
Hariand, Executive Director Fixed Income Division. 


m 


THE INVESTMENT BANKING ARM OF THE BARCLAYS GROUP 




Trainee Analyst 

Scandinavian Markets 

/Continental European specialist 
V-/ stockbroker requires Scandinavian 
language speaking trainee analyst to 
cover Scandinavian markets. 

^ ve degree or equivalent 
qualification in economics or business 
studies (post-graduate qualifications an 
advantage) and an understanding of 
the workings * of Scandinavian capital 
markets and institutions. 

Write, enclosing CV, to 
Mike Ketley 

Gate House, 

1 Farringdon Street, 

London, 

EC4M7LH. 












FINANCIAL TIMES WEDNESDAY AUGUST 24 1988 




MERIDDEN 
INTERNATIONAL 
BANK UMTTED. 


MerMan international BankLM.,te part of the ITM i nte rna tional Group of oompanteewhoeo 
opersttonsareprtmarify located Inthe continent of Africa. The Bank has been set up biter 
wato mobJfce financial resources for Africa-Jjased projects and due to the rapid expansion 
of its activities In this and related flaws It Is now saeWns the foflowlng additional staff. 

Vice President — Project Finance 

TTris appointment fe based at the Bank's London Batson office. Candidates should be able to 
demonstrate a capacity to mobffise resources from bUataral and muttnateral donor agendas 
amt should possess extensive knowledge of International finance and the major financial 
instruments. A willingness to work to Africa and an enH0fttened attitude towards the potttical- 
Bconomfc environment In that continent will be expected. 

Assistant Vice Presidents. , 

Preferably dttzans of an African country, these wffl be based hftfefr to Lusaka, Zambia at 
the Bank's principal office but opportunities lor transfer to other branches to Africa may arise 
thereafter. Appointees w to market the services of the Bank In the field of trade, capital 
equipment end contractor finance, project development and -finance and deposit md 
tovBslment management They will also be expected to cany out project feasibility studies. 

AH the above positions can for experienced personnel holding relevant postgraduate 
qualifications, with an abflOy to speak French or Portuguese as well as English. An attractive 
remuneration package wffl be offered to the success candMates. 

Please reply enclosing a M C.V. and the names of 3 referees to the Managing Director; 

P. H. Recmtiment ijrtL, 16 Grosvenor Street; London WNX 9FB. 


INTERNATIONAL 
FUND MANAGEMENT 

FIXED INTEREST 

SUBSTANTIAL REMUNERATION - CITY 


Sub«rta^aiUS1tnancMlrHrti«ution($50bnurKlermariac|QraenQhaaestabtatwdBrMae 
London kvraetnwfit management company whoae funds are concentrated initiafly in 
EurodoBar and muftf-curroncy fixed rawest security, with MdMtantW growth pnemed. 

Reporting to the UK Managing Dbwctoc the poeUonwW often, in hie abeence, be 
r— porratbte for the oompittiy^ln v s tm e nt a ff a ir e. A WghcaBbre person of sound 
judga ™ ^n wbJBf^i^rw*tton. and with good management preflontatkan«idlnveetiTierit 

CendhteaaawW be B^Ftoance; and/dra graduate In tnalha or a t a tt a U ca , computer 
o ri entated, famttar with RC.prog »n itn i nfl and with quantitative techniques in 
investment management. They wM be able to undertake risk analysis and performance 
analyala far the funds under management^ They win have some years experience of 
managing an International fbfed intereetportfotto. 

Please write in confidence with futi earner and salary detalsto D MacJeod at JSI 
B ela rH o n. 'W I la y ma rkat, London SW1Y4BP (01-930 9090>. 

JSI Selection 

WBajma rtwr,lnwrfnw SW1Y4BP.Wa|iho » » ai 01-839 4953. fax 01-839 4214. 


International Appointments 



THE COMMISSION OFTHE EUROPEAN COMMUNITIES 

^Iino»T European strategic programme for Research and 
/ DeveTopment in information Technology 

HEAD OF DIVISION 

(Software and advanced information processing 
COM/R/A/34) 


The Co l . _ _ 

iry pest which Involves 

ESPRIT programme. 


llty for one*tmrd of the total 


mmwwis i imig 


software development •. 

High-level neootlatfna experience with both governments and industry and expe- 
rience of staff managementare essential. 

ADogcantS should: 

D have a university degree In a relevant flrtdn have at least isyearspost-gradi^e 
exoerienceln the areas stated above □ be nationals of one of trie EC Member States 


□ possess a thorough knowledge of one community language and a working 
imourteSw of a second. A very good knowledge of English Is essential fbr this post 

□ be aged approximately 40-50 years. 

contracts wW he form initial period of three years with possmmtfof renewaL 
Employment wiu be In Brussels. 

to aooivfor this post please send a detailed eumcuHim vitae {preferably In English) 
giving details of professional ejmerlence arej level of responsibility. - 


reference COM/R/A/34. 

COMMISSION OFTIHEEliROPEANCOMMUNnTCS . 

200 rue (iff la toi - J7Q - 5/14 - moo Brussels. 
THECOMMISSIO«BME<mOPPOimjt^BiPlOYH 


* 


HIRAM WALKER-ALLIED VINTNERS INTERNATIONAL LIMITED 

international area manager 

AFRICA AND MIDDLE EAST - 

m,.,. . vtanan Imcrn*tionaI Unrilod Is seeking to recruit an adgtional J totemTton al Area 

p*>»* <* “<’«*• 

Tbc prinnur r—*-**^** ** ,lka B— >etm * maaeacc* 611 * ti* 8 appobited datiabutioB. the Artai Managpr bang the 
Bread Owner's represcgiintive it* bh market place.- 

A WRh of end meiasafcl edkd tor together ^ d las* Usdu* hn&Ki 

coupled 38 Ta P««i reTre*»:.*luu tlnwwtical appmdu ... 

_ . -1 in omdldaRts both mate and flnxnfe. poncoaing a uuhwiftydegn* who axe in their 

JJf Srectured sates aw* background and experience of thc relown markets. 

a. ttu i will be baaed la Bmatete sod involves reteufc* travel In third wodd countries language 

FriS wSd ba usefoL Applicants should bo prepared to-mand up to nine month* of die 

year away from home. . ' ~ ......... 

Th« Iniumd in UBS Potion should _*ppiy in writbtt. ew*wag *-fcO CV ? id!- - - 

|» I D EMa. PWoaaMt Eiwiiiire 
Hlnga vyaBaasUffled Vtetnereln terea t ta ml LteaBwl . 

UuioirSWiy SLR • _ 

• Tekfhoot a - 01 7W 8899 - ■ - - - ' L; : 





FINANCIAL OPPORTUNITIES 


SENIOR MANAGER 


it* PF/4 43. 

RESEARCHER 

. Experienced specialist required Tor a quality boose in [be 
German A. French Bond maifccis. Fluent speaking h both 
-Goman ft Frenc h is essential- Please cafl Richard Ward. 
AUSTRALIAN EQUITY SALES 

Must have at least one yean experience in Australian Equity 
sales with coverage of UK. OBcnuaL For further information 
pteasc call Karen Gray. 

FUTURES TRADER 

Good experience required of trading all mstrumenu. Candidate 
must have a good working background. Please call Richard 
Ward. 

SALES - EUROPEAN EQUITY SALES 
To UK - fluent French. Experience with Equities sates, prefera- 
bly European. Large international house. Please call quoting ref 
Df/310. 

EUROBOND SALES 

Candidate most have two years experience in Eurobond sales 
ideally with a good Sc a ndin a vian or UK diem base. Please call 
Karen Gray fbr details. 

FUTURES SALES 

Good e sp aieutx in quire d in Institutional Saks of Futures. 
Candidate must have a good working background and good 
contacts. Please call Richard Ward. 

SALES - FRENCH FRANC GOVERNMENT BONDS 
Must have O-A/TVs sales e sp e i ie uce. Top parfcagr available. 
Quote ref DF/6IQ. 

MULTI CURRENCY EUROBOND S A LES 
Good e xpet ici t cc needed in Deutschmark, Sicrtiim and Guilder 
Eurobond sales. Please ring Karen Gray fbr further details. 
AUSTRALIAN TRADER 

Very good ex p erien ce req u ired in trading Australian Govern- 
ment Bends, setm-GovernmeM Bonds etc. Phase call Richatd 
Ward 

CORPORATE FINANCE 

Mi annum I years experience. Would suit graduate with at least 
I Europ ean language. Ref Df/843. 

CANADIAN DOLLAR EUROBOND SALES 
Reputable house seeks ex p erie n ced Canadian Saks people with 
mod European chest hue. For further information phase caQ 
Karen Gray. 


MANAGER - FIXED INCOME SALES XNEG 
4 yean e x perience 

GILT SALES £NEG 
2 yean e xperien ce 

TREASURY SALES £NEG 
2 yean e x per i e n ce 

CONVERTIBLE BOND SALES £NEG 
2 years experience 

EURO COMMERCIAL PAPER SALES XNEG 
2 years experience 

SYNDICATIONS SPECIALIST XNEG 
Capital Markets experi ence 

JAPAN ESE EQU ITY SALES XNEG 
2 yean mm te nre 

MANAGER - JAPANESE EQUITY SALES XNEG 
Min 4 years e x perience 

UK EQUITY SALES TO EUROPE XNEG 
2 years experience 

EUROPEAN EQUITY SALES TO UK XNEG 
2 years experience 

MANAGER - UK EQUITY SALES TO EUROPE XNEG 
Min 4 years exp e rience 

CANADIAN EQUITY SALES XNEG 
2 yean experience 

FIXED INCOME SALES XNEG 
Scandinavia - 2 yean experience 

FIXED INCOME SALES - UK XNEG 
2 yuan experience 

For flirther details of there vacandea please call Sue Stephen. 


01 3776488 

Cambridge Appointments 
232 Shoreditch High Street. London El 

=4 01-377 6488 1 = 


policies 


LIQUID ASSETS MANAGER 

GLASGOW EXCELLENT NEGOTIABLE PACKAGE 

Murray Johnstone Limited is one of Scotland's leaefing independent 
investment management groups, currently managing assets of over £4,000 million. 
Wb have a wide range of cHents including Investmenl Trusts, Unit Trusts, Pension 
Funds, Venture Capital and Offshore Funds. 

As part of our continued development and progressive nwiagement 
approach to clients? requirements we have created a new rote of Liquid Assets 
Manager, whose technical knowledge of monetary products will be used to assist 
Investment Managers in formulating profitable policies for Bquid assets. 

Based incur Glasgow offtoe, yotffl be expected to contribute to views 
on currencies to which to place efients? Squid assets in older to achieve high 
terete of interest. 

Probably aged around 30, your experience (which may hare been spent 
in an international bank. Insurance company or local government treaswy function) 
wtfl have given you the abffity to manage large amounts of money 

You wffl be expected to Ealse with Investment Managers and clerical 
admHstrators so axceflent inter-personal skills are essential, as is the ability 
to make decisions and takB the initiative in complex situations. 

The rewards package is pitched at a level that wfll be attractive 
to the highest cafibre inrSviduals. 

Please write with fufl &v. to: Dave Blggart, Personnel Manage^ 

Munay Johnstone Limbed, 7 West rate Street, Glasgow G1 2PX. 


MURRAY 



Far Eastern 
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based in London with strong 
market presence requires stock 
option market maker or trader 
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FINANCIAL TIMES BUSINESS INFORMATION 

Investing 



by Daniel O'Shea 

4th Edition 

Is your money working 
as hard for you 
as you do to earn it? 

Haw well informed are yon? 

Do you know a rights issue front a scrip issue? 

Can you distinguish a merger from an acquisition? 

Do you know the difference between unit trusts and 
investment trusts? 

Investing for Beginners will provide yon with the answers. 

Aimed at raking; the investor right through the 
complexities of the stockmarket from scratch. Investing for 
Beginners sets oat to demystify the basic principles of the 
markets in a practical and authoritative way. It examines 
investment media ranging from equities and, life insurance 
to related issues such as the interpretation of company 
accounts. 

Developed from a series of ‘Beginners Guide’ articles 
publis h ed in the Investors Chronicle, this latest edition has 
been revised to reflect recent radical changes in investment 
and taxation and the ways in which they affect the investor. 

A dear and comprehensive guide, invaluable both to 
those new to the stockmarket as well as experts wishing to 
refresh their ideas on the subject. 

Published August 1988. 


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Limited 

A$ 200,000,000 
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In accordance with the Terms and Conditions of the Notes, 
notice is hereby given that for the first Interest Period 
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FINANCIALT1MHS 























MANAGEMENT 


D resdner Bank, West 
Germany's second 
biggest financial 
institution, with 
total assets of DU 2Q7bn 
(£64.Sbn), has a problem. Its 
towering steal-dad headquar- 
ters in Frankfort may be a few 
metres teller than Deutsche 
Bank’s twin towers, but when 
it comes to publicity, its larger 


>ora1 


the headlines. 


Dresdner Bank: beavering away at 
building a reputation on the quiet 


Nothing illustrates the dis- 
parity better than the two 
banks’ strategies towards the 
European Community’s 

planned free market in finan- 
cial services from 1992 or there- 
oboute. Deutsche Bank (total 
assets DM 268bn) has been 
using its bigger resources to 
buy strategic stakes or out- 
right control of banks through- 
out Europe as part of a pfao to 
be represented prominently in 
all key EC markets by 1992. 

By contrast, Dresdner Bank 
has appeared to stand stQL Its' 
inactivity has triggered criti- 
cisms of a lack of vision, nego- 
tiating 1 din, money, or a com- 
bination of all three. Strong 
rumours that it faded to pull 
off a major bid in Italy have 
fostered that impression. 

Even Commerzbank, Ger- 
many’s third biggest bank with 
total assets of DM 1629m. has 
won some praise for its defen- 
sive strategy of cross share- 
holdings with European part- 
ner banks. 

But the criticism heaped on 
Dresdner Bank is not entirely 
fair. Not emulating Deutsche 
Bank’s ambitious expansion or 
Commerzbank’s defensive 
pacts does not mean it has 
been slothful or unambitious. 

The bank under its chief 
executive Wolfgang Rdller has 
identified securities trading 
and fund management — two 
areas where its strength is 
acknowledged - as sectors to 
push in its 1992 strategy. As a 
fond manager, it already has 
Just under DM GObn under - 
on a par at least with Deutsche 
Bank. 


Haig Simonian contrasts the style of West Germany’s second largest financial group with that of its rivals 


coherent presence in Europe 
for the more competitive days 
ahead? 

Protecting its competitive 
retail position in Germany, 
where foreign banks will be 
increasingly attracted after 
1992 by the high standard of 
living and savings rate, is the 
watchword. In its wholesale 
business the bank intends to 
compe te aggre ssi vely to attract 
funds from institutional inves- 
tors around the world. 


Dresdner Bank’s surprise 
purchase of Thornton, in 
which it now has an almost 73 
per cent holding, is the first 
step in its strategy. The acqui- 
sition has given Dresdner two 
new strengths a presence in 
sterling funds and a strong 
position in the Far East, where 
Thornton has soecialised. 

With some £950m under 
management. Thornton, which 
made about £3m after tax last 
year, has quickly established 
itself in the UK ftmri manage- 
ment business, with some 15 
listed fonds. The company was 
heading for a £100m flotation 
last autumn until its value 
plunged after last October’s 
crash. 

Gaining control this year 
cost Dresdner Just a quarter of 
that. “With Thornton we 
bought people too,” notes atm 
member of the bank’s manag- 
ing board. “Others wanted to 
buy, but they were just inter- 
ested in the funds under man- 
agement." 



Wolfgang Hotter (left) and Richard Thornton: Dr 
as areas for expansion - buying T h om son a Co 


wr Bank Men ti fted oocurtBea trading and fund manag wwrt 
> a «tap along Oils rood 


After buying Thornton & Co. 
a privately-owned UK fund 
manager, in May, it now plans 
to expand its business further, 
partly fay acquisition. On the 
dealing it already ^ an 
international securities net-, 
work that is particularly 
strong in the US and which is 
arguably ahead of its German 
rivals already. 

But how do trading and fond 
management fit together, and 
bow does Dresdner Bank hope 
to knit together its interna- 
tional network, which now 
a subs tantia l Stfijiing- 
based presence in London, on 
top of its established local cur- 
rency activities in Germany 
and New York to give it a 


Apart from a sizeable Lon- 
don Thornton about 
80 people in Bong Kong. "It 
has a fantastic reputation out 
there," says the Dresdner 
director, noting that its Far 
East business is not Just based 
on trading for European inves- 
tors, but locals too. 

Marriages between cautious 
German banks and more- 
swashb uckling Anglo-Saxon 
operations have not always 
been without friction. How-- 
ever, early signs are that the 
Dreatner-Thomton 'nutrfi may 
be better aligned than most. A 
key factor here is the shared 
emphasis on longer-term 
gr o w th rather *h«i short-term 
profits. 

"It’s not a quick bock philos- 
ophy," agrees one Dresdner 


execut i ve, speaking of Thorn- 
ton's. Moreover, by insisting 
that existing management 
keeps a minority stake and 
asking Richard Thornton to 
stay on for another four years, 
it has sought to cement that 
contin ui ty. "It's a good time- 
frame to build this thing,” says 
Thornton, who suggests that 
further friendly takeovers of 
UK ftmd managers are not to 
be excluded. 

ih gamting its US fund man- 
agement presence is probably 
Dresdner Bank’s next step. In 
the past, it has been held back 
by the Glass-SteagaU Ant, 
which separates securities 
broking and underwriting. 
However, it now feds there 
may be a in wind. 

Dresdner has two US securi- 
ties vehicles: ABD Securities 
Corporation, an investment 
hanking subsidiary, in which 
Bayerische Hypoth eX eu-und 
Wechsel Bank hag a minority 
stake, and ABIE, a food-man- 
agement business. Together, 
they JMMg mn L for anme p Hhn 


funds under manag ement 
worldwide. 

However, its gristing US 
securities business is "grandfa- 
thered" under US law. This 
means that as a long-estab- 
lished business its existing 
activities are exempt from the 
provisions of the dass-Steagall 
Act but are prevented from 
buying any farther going con- 
cerns. Thus expansion in ftmd 
management «»n only come 

ttitoi-iwlly jf flip hank js tO 

jeopardise its existing commer- 
cial kanktiig activities. 

ft now thinks matters may 
be set to change, though, for 
the may nave found an 
acceptable way around the reg- 
ulations. Much still depends on 
discussions with the Federal 
Reserve Board, but "it is possi- 
ble something will come 
through by the end of the 
year," says one board member. 

The bank is unwilling to 
name specific bid targets, but 
it has a variety of options in 
mind, ranging from outright 
purchases of US fond manag- 


ers to closer cooperation with 
big US institutional investors 
like tire pension fonds. “With 
1992 approaching, many US 
parties are becoming more 
interested in Europe ana would 
like help with an entree," he 


Significantly, contact with 
US frartfattinrMii investors has 


mmo through the broking side. 
ABD already seats on fly* 
Boston Stock Exchange. Its 
boss, Theo Schmidt-Scheaber. 
.was the first foreigner to be 
made president of that bourse. 
More recently, it has bought 
five seats on the New York 
Stock Exchange, considerably 
h n pdc H rig tts US PT Yifflp- . 

"ABD is now ahead , of all 
other European banks in New 
York when it comes to sales of 
European securities to US pen- 
sion funds," riirfma execu- 

tive. 

Local representation hes at 
the heart of th e link between 
selling secoritias manag- 

ing funds. “If you talk to peo- 
ple about and the perfor- 


TECHNOLOGY 


O 


O ne of the corporate 
goals of Gap Gemini 
Sogeti (GGS), the 
largest computer 
software company in Europe, 
is to be among the top three 
software suppliers in every 
European country. 

ft has achieved that position 
in most Continental countries, 
but in Britain CGS lags for 
behind its competitors. 
Whether measured by turn- 
over, £&5m in 1887, or by staff 
only 150, the UK operations of 


CGS takes drastic 
action to break out 
of a niche market 


CGS are tiny compared with 
the leading UK companies such 


the leading UK companies such 
as SD-Sdcon, Serna and Loglca. 

Ihiring the 1980ft, CGS has 
achieved an average annual 
growth rate worldwide of 
about 30 per cent, two-thirds 
through internal growth and 
one-third through acquisitions. 
According to Serge Kampf, the 
chairman and founder, the 
French company aims to 
expand at a similar pace for 
the next 

If it succeeds, the group’s 
1996 tarnover will reach nearly 
$8tm, though even so it will 
have only 2 per cent of the 
global data processing market, 
or 5 per cent of the profes- 
sional services market. 

In the UK, CGS has 
remained largely in a niche 
market, supplying communica- 
tions systems for the emer- 
gency services - police, fire 
amfl ambulance. So for the com- 
pany has felled to expand its 
British activities by buying an 
gg teWtehfid UK software house, 
despite a long search which 
has in v olved unsuccessful dis- 
cussions with more than 20 


Clive Cookson examines the efforts of Europe’s 
largest software company to catch up in the UK 


takeover candidates. 

In May the parent compa n y 
took mere drastic action. Paul 
Hofmann, vice president for 
business development at Gap 
Gemini Europe and the leading 
corporate troubleshoo ter, was 
sent in to run CGS (UK) for 
about nine months and. in his 
words, "to start a revolution." 

Three months into the mis- 
sion, he has drawn up d e ta il ed 
plans for rapid internal expan- 
sion, which would douhle the 
size of the UK workforce to 309 
by the of 1989 and take it 
to 450 by the end of 1990, even 
without an flccndstioxL 

Bat Hofmann is looking for a 
UK software company to buy 
and if he succeeds the overall 
growth could be very fast 
indeed. "I would tike to go for a 
company in the manufacturing 
or finance area," he says, '"but 
if I found a very good company 
which specialised in another 
field I would take it anyway." 

A hostile fakl for a software 


company would drive away 
so Hofmann jaijrin that 
any takeover must befrteufly 
and flgnbr managers from 
the company acquired should 
Join GGS. 

At present CGS has only two 
UK offices, at Ylewsley near 
Heathrow Airport and in Man-’ 
cheater. Hofmann’s internal 
expa nsi o n plan will add six 
new offices. By the end of 1989 
there will be four regional 
branches (Manchester, Bir- 
mingham and probably Bristol- 
and Newcastle) and four offices 
covering market sectors: the 
public sector (building an pres- 
ent work for the emergency 
services), fi na n c e , manufactur- 
ing *th! prints fjrov 

CGS is a strong player in the 
market for financial an d manu- 
facturing computer systems in 
other countries, but in the UK 
these businesses will have to 
be built virtually from scratch. 
Hofmann has already 
appointed someone to head the 


iwawri fi« r*nringr h iiah m ax, 

b likely to focus first cm con- 
tinuous industrial processes, 
such as chemical plants. He is 
about to select a leader for 
CGS’s UK financial services 
business; it wffl. conce n tr a t e on 
banking systems If someone 
with a banking background is 
chosen, and on insurance if 
someone from the insurance 
industry gets the job. 

Although there is a world- 
wide shortage of professional 
computing s ta ff TTnfmami does. 
not think CGS will have too 
much trouble recruiting 800 
people over the next 18 
m on t hs. "It’s easie r to get good 
people in the UK than in Ger- 
many or S witzerlan d." he says. 
Even 60, for the next few 
months be will rely on experts 
brought over from CGS subsid- 
iaries in other countries, par- 
ticularly financial systems spe- 
cialists from France and 

laaiwifairfa irfa ijf specialists 

West Germany and the Nether- 







Wm 

m 

-- 

m M 

V--'" 

•.'SXi&Eii 




wW 1 

‘‘ m -i ' 

:u ••• \ T, : : f . -:- : T ' 







FINANCIAL TIMES WEDNESDAY AXTGUST24 



DSGL its real estate fond. 

Outriglft acqtifeiflan of other 
continental European hanks or 
fond managers is not port of 
the strategy, although Thorn- 
ton employees suggest further 
UK friendly takeovers are "not 
rated oof. Nor does Dresdner 
have full-scale mergers or 
smaller cross-holdings with 

nthw Wmiijiiwn hgnfaffl 

Rather, it is winking from 
two hey assumptions. First 
that the’ gradual abolition .at . 
banters to Buropean financifil 
services wJE make it. possible 
to do more In European mar* 
kets from its German base. 
Second, that no one. single 
approach, such as Deutsche 
Bank’s acquisitions or Com- 
mejsbank's cross-holdings, in 
applicable throughout Europe. 


Business 

courses 


bition October 19-28L g*- 

SSLOOO. Details fooffl JJJJT 
fere nee Manager 

Fbium>,^n«sCrafcre^ : 

FIE. 19 Tanghn Bond 

TangflnKwpidngCtotr^Sing- 

aporelOM. 2355232 «• 

7349 385. Trie s Rs 400133 ATT. 
Fax: 7379027. ' . 

Manag ing strategic, alliances 
- the European dunenMon, 

London. September 19. Fee. 
non-members £210; personal 


members £180; corporate mem- 
bers £260. AB fees snlriect to 


mance is there, then ft leads to 
talks about running part of 
their money," one 

executive. 

Those c on t a ct s have already 
started to bear fruit, with the 
possibility of some $500m in 

jumrirm fund mcmey ahnnt to 

come Thornton's way, and may 
frin gynn if flw hanfc succeeds 
with its US plan later this year. 
But in the meantime, Dresdner 
is taking further steps to 
im p rove its service to US insti- 
tutions by setting up a 24-hour 
trading capability in German 
sec uriti es in Frankfort, allow- 
ing US rife n tg to do business 

OPtridB imimmf f>r mim hOUTS. 

What of continental Europe? 
Obviously, Germany is the 
bank’s strongest ares. Some 
DUBQbn total fan^g managed 
are split between DIT and OBJ, 
its two domestic fond manage- 
ment subsidiaries, which 
together account for about DM 
30bn in assets. A further DM 
lfibn Is handled by the bank’s 
own trust deportment, while 
some DM 4fan is i n verted in 


Countries like the- Nether- 
lands can best be staved from 
Germany or Luxembourg, 
where the bank is already wwl 
placed in both institutional 
and private client business, ft 
has recently set up Dresdner 
Bank Asset Management as -a 
special offshoot ini Luxem- 
bourg. By contrast, France, 
fogy and Spain - the three 
most attractive, markets for 
German banks today - require 
different approaches; it says. 

- fa France,where acquisition 
op port u nities are limited, the 
bank intends to develop its 
existing subsidiary, Banque 
Veuve MorinrPons, based m 
Lyons. The bank already has a 
fftmiia nF frnids for i t s d omw ftir- 
efientsand Dresdner now plans 
to expand these and possibly 
offer German investors a 
French ftmd later. By con t rast,, 
acquisition may be the right 
approach in, Spain, where 
many d omes tic financial insti- 
tutions continue to need capi- 
tal, making an outside 
•approach more welcome, 
Dresdner executives think. 


Haly is mntlMg matter. Hav- 
ing perhaps had its fingers 
burned on an abortive bank 
acquisition, cooperation with 
other financial institutions 
such as insurance companies 
or pension funds is to be 
Dresdner’s strategy. 

For those mesmerised by 
Deutsche Bank’s ambitions' 
acquisitions, Dresdner Bank’s 
approach may Took daft But 
there must be many European 
iwnk« occupying the number 
two -or three slot in their 
respective countries which 
lacketther the resources or the 
management inclination for 
takeovers on a wide scale, even 
if all the chances were there. 
Examining and playing on 
their strengths, as Dresdner 
Bank is attempting, may be fire- 
light answer for them too, 
ahead of 1982, even if it does 
nrf ^a y i i iwt a)i flifl headlines. •’ 


hers £260- All feesjeme^ 
VAT and payable to 
Details from Christa Langan, 
The Strategic Plannin g Soci- 
ety, 15 Beteave Square, Lon- 
don SWL Tel: 01-285 G346. 
Man agin g information tecn- 
nology opportunities, Lomwn- 
September 19-28. Fee: £L60O- 
Details from Louise Ashneld, 
Registrar, information Tech- 
nology Programme, London 
Business School, Sussex Hac®. 
Regent’s Perk, London NW1 
4SA. Tel: OX-262 5050. ^ 
Strategic networks - howto 
use communication networks 
to gain competitive advantage, 

: London. September 28-29, 
March 9-10 1989. Fee; first dele- 
gate £495; additional delegates 
£445. All fees subject to VAT 
anil payable in advance. 
Details from The Network 
Resource Centre, 2 The CMpel. 
Royal Victoria Patriotic Build- 
ing, Fitzhugh Grove, London 
SW18 3SX. TekOl-871 2546; 
Telex: 299180 MON1NT G; Fax. 
871 3868. 

The international Insurance 
amt 1 zfsk management confer- 
ence, Lisbon. October 24-26. 
Fee: non-members BFr 74,000; 
members (AMA/D BFr 66,600; 
risk ’ managers BFr 62,000. 
Details from The Customer 
Service Department. Manage- 
ment Centre Europe, Fostbus 
95, NL-3417 ZH MoofibOEt, The 
Netherlands. Tel: Belgium 32/2/ 
516J9.il; Fax 32/2/513.72.08; 
Telex 21917 mce b. ■ ' 

The annual company report- 
latest developments, London. 
October 6. Fee; £205 + VAT. 
Details from Nicky Hoberts, 
Legal Studies and. Services, 
Bath House; 56 Hblbom VS a-* 
duct, London EC1A SEX. Tel: 
01-236 4080; Telex: 888870. 
Network architecture - the 
multi-vendor environment, 
London. September 26-27. Fee: 
first delegate £495 + VAT; 
additional delegates £445 + - 
VAT. Details from The Net- 
work Resource Centre, 2 The' 
Chapel, Royal Victoria Patri- 
otic BuOding, Wtflmgfa- Cmw,,- 
London SW18 3SX. Teh 01-671 
2546; Telex; 298180 MONINTG; 
Fax: 871 3866. ’ 


New dawn for a 
bright system 


E ss^ss^s 

technology which 
a tte mp ts to mimic h uma n rea- 
soning , seems se t for rapid 
jpowth after years of fijfltng to 
five up to its promise. - . . 

According to Ovum* a Lon- 
don-based consultancy whhfe 
has been following the devefc 
opfcncnt of toe expert s ystems 
market since toe asdy 1990s, 
growth rates in excess of 30 
gmrcent a -year now seem 

The period 1987-88 was terri- 
ble for the. expert systems 
bus i n ess , says Ovum In a 
study* due out tote week. It 
potato -out that in the US, file 


sent In "to 


lands. 

Hoflnann, a 89-yearoid Ger- 
man. speaks from experience 
rather than youthful enthusi- 
asm. He joined CGS in 1982 
after spending 30 years, with 
IBM. He hopes to band an Ins 
UK revolution to a British 
leader at the end of this year. 


"We have three candi d ates for 
managing director," he says,’ 
"bat tfaelistisnot c losed." ff 
Bot DMtna succeeds in buying a 
UK software company in the 
mar future. its, chief exec uti v e 
would be a 'leading- candidate 
for the managing director’s 
rote. 


cmnpantss which once led the 
indwtry hare run into losses 
and cut back heavily on staff 
In the UK, moat of the cam- 

sy s te m s deveSojpnents^ltaYe 
been losing money. “Financial 
rescues in various toons have 
been fits order of the day." 

Expert systems use tech- 
niques derived fr om artificial 

the musfon that computers 
can give reasoned a ns wers to . 
questions. Their .potential as 


"Besults havs Included dou- 
bling toe jw w nwt pf business 
g e nerated by sates calls and a 
five times increase in the 
recommendation of new busi- 
ness by satisfied customers." 

Security Pacific, In Calif- 
ornia, developed a s ystem to 
detect debit card fraud and 
riateed to Java saved 8144000. 
over one weekend. A- loan 
advisory system developed at 
Banqne Hervet In France has 
reduced fits time' taken foe c a 
loan d erigh w from 19 days to 
1^2 hours; 

The Ovum Study MettsW 
two areas of toe market as 
befog particularly promising: 

• The market for software 
packages to develop expert 


systems on high powered 
workstations and advanced 
personal computers. Such 
packages retail at between 
gMMO and *10,000 a copy. 

• Soft ware for developing 
expert systems an mai nfram es 
®p®ting upwards of 
*100 ,000 , 

Ovum says the notion that 
targe companies would be pre- 

SSgiSi **$**5 ? * ** 

mtaqp ie copies of azz expert 
system is false; so is the idea 
! .» ™ systems corid be 

Used Hhe s preadsheets or .weed- 
.■ processors by ordinary office 
workers. 

'Oie industry is fragmented' 
*“3 foc hs le adership. Ovum 
says, printing out that hard- 
ware sumHars like IBM, Digl- 

tol Equipment and Siemens 
have the resources and the 

SS? while small 

Spemaftst companies have the 
f peunripgy. and consultancies 

fire systems expertise 
Its Bgro ris flat hardware 
wa aga a lfs are best placed to 
Jg^toWthw toe esseutiS 

^ dnk ? 'tatwwn the hard- 
ware vendors and specialist 
wffl be a 

MjlW l^qnipmettt vrtthJteE 

fittenmtiunal 
CogPWws with Expertech. 


expert “advixers” or as icnosL 
tories of expertise had 
prompted hdrtness analysts to 
predict the emergence of a 
multi-mlllian-dollar business 
by fire early 1990s. 

Hie study shows that today 
toe wurid market for expert 


London’s black cabs hail the computer era 

N ext time you need to nies are restricted in. toe nmn- ■ 1 

order & taxi in a harry, ber of rJmnnete they are aBo- / 

do not despair tednud- cated because of the high 'TftXf » * 


N ext time you need to 
order a taxi in a harry, 
do not despa ir technol- 
ogy is coining to the rescue. 
Hundreds of Lo ndon's bl ack 
cabs are being computerised, 
which should result tn a 
shorter wait for customers who 
summon them by telephone 
Dfal-A-Gab, a friendly society 
in which each of the drivers 
has & share, plans to have a 
computer terminal in all 1,400 
of its cate by the end erf Octo- 
ber. The small display and key- 
board will be used to send and 
receive information over the 
society’s radio network. 

Computer Cab, which ri«hns 
to be London's largest blaric 
cab company with 2^00 cars, is 


introducing a pilot scheme in 
September involving 100 of its 
taxis. Eventually all its fleet 
will be equipped with radio- 
linked terminals. 

Like most of London’s 
mobile radio naers, taxi compa- 


nies are r e stric t ed in. toe num- 
ber of channels they are allo- 
cated because of the high 
demand for radio spectrum m 
the capital. By transmitting 
the information digitally, DlaL 
A-Cab and Computer Cab are 
'planning to squeeze more mes- 
sages down their existing chan- 
nds, sod so to increase their 

business. 

The two companies have 
chosen very different methods 
of imple ment ing their com- 
puter programmes. 

Dial-A-Cab has bought a 
zonal system developed by 
Vancouver-based Mobile Data 
International Zonal systems 
rehr an the driver tapping in 
t h e grid reference of the taxi so 
♦h«t the control centre can 
match cabs to jobs. In London, 
the driver wffl tap in the dis- 
trict post code. Th» sort of sys- 
tem fa alread y In use In north 
America and Europe. 

It enables Dial ACab to elun- 




JVFilCAu/ 

You ... j 


fnate radio contact between 
the taxi and the control centre; 
the taxi’s location is keyed in 
fay the driver and the informa- 
tion about the next job Is sent 
back by the control centre to 
the cab, where it flashes up an 
the display screen. The driver 
can also fill in Information 


such as the destination, fore 
and job number, dispensing 
with paper do******, 

• Ken Burns, DJal-A-Cab chair- 
man, says: "There are 18 
systems like this working 
round the world and it will 
work successfully here.” 

However, Computer Cab’s 


managing director. Geoffrey- 
Kaley, has rejected the idea of 
a zonal system. "We didn’t like 
the volume of unnecessary 
updati n g. There fa a ratio offtl 
for the number of times fife 
driver Ires to update Ms loca- 
tion to the number of jobs he 
receives,* he argues. Kaley has 
ratted' on Computer Cab's tech- 
nical team to develop the , 
Admiral computer units 
in-house. 

Admiral Is the first phase of 
Computer Cab’s rampaterisa-' 
ties prqject The computer win 
work with the taxi's 'existing' 
-radio system and receive fife; 
address of the next Job. ft wffl- 
also replace toe paper docket 
system^ 

The second phase, scheduled 
for next year, wffl see bidding 
for jobs digitised. Meanwhile, 
the central control operators 
will continue to read, them out 
over the radio and the drivers' 
wffl bid for than on . 


their location. 

The company plans to use 
one of fi» existing vehicle locfr 
tom systems, which keep track 
of vehicles using radto 
between, a tra nsmitt er in the' 
vehicle and a series of radio- 
beacon or aerial receivers. Tbs 
location ttf avaflaWe cabs wtll 
be fed back automatically to 
the control centre. 

Although' the total devetop- 
foent cost of Com pu t er Cab's 
s y s tem will be £2m.- tire com- 
pany experts it to pay off hand- 
somely. Because each digital 


about $458m (£265m), stellar 
to that for accounting software 
packages. 

Oven suggests that fire 
overall market for software. 


Kafay behaves be wffl be aUe 
to add another 3^00 cabs to fife 
networtBventtmlly-heifihop- 
ingto.sril the. systen.to other 
taxi companies. 

Wal-A-Cab has . spent £2&n 
on its compotes and fe-pkuK 
ning to increase its taxi fleet to 
at least 2^00 over toe next five 


DeOa Bradshaw 


grow fa the US from 2853m fa 

1968 to S3£8tata 2992.lt esti- 
mates. the -co r r esp o n ding, fig-, 
ores for Bnrope at <35tot and 
gLSbn. 

B» reasons it gives for fids 
hew growth are: a rapldly 
tesrtnf wmnW of apphea- 
tipns: more mature technol- 
ogy, cither to. the needs of 
mainstream data 'processing^ 
and a nuraisalisde mariEefing 
focus on prodheta. with - 
ko igto nn potential. 

Ovum reports tftata imniber 
of ptooeertug usera are show- 
ing Identifiable rrtnrns. For 
example, the John Hancock 
Mutual Life insurance com- 
pany of Boston, Massachu- 
setts, developed a system to 
nw«mwi ie n d snhalde' 
advice packages for clients. 


1 




5^°“. Out could® 




Cane 


> I 


! I: 


**■■<*• ■“ 




v » <r/ \ 


■ M 


* - 


f 

Sf’ 




FINANCIAL TIMES WEDNESDAY AUGUST 24,1988 


11 


Vs 


1 or i 


11 




r.S 


■ 

V rf 
I’ 


S' '.if 

^.7 




r**' 


TELEVISION 


' Students’ snippets 





/ t fat both fascinating 

heartening to find, amid 
tlw repeats and the for- 

nmla-rldden soles which - 

Kwm such a large part of the 
summertime dross on televi- 
sion, a series such as First 
Rtm. Admittedly there are only 
four episodes, and you hare to 

live in London to be ab fc to see 
them. Even that, however, is a 
major advance, because they 
consist entirely of short works 
produced by students from 
Britain's film and television 
schools, and in the past the 


only^ places to see each mate* 


— J have been graduate screen- 
ings and very occasional 
festivals. - 

These four programmes 
(presented with astonishing 
nervousness by ftim producer 
David Puttnam who, despite 
the obvious worthiness', of his 
intentions, may well have 
driven away some viewers 
with the 2»mhte4fice monotone 
in which he read the autocue) 
confirmed what has been 
argued in this mitrmw in the 
past: that many of the peo ple 
coming out of bur film schoo ls 
combine a high degree of pro- 
fessionalism with remarkable 
creative originality. 

The best of the nton works 
being shown is, in my view, 
Scmdmo Bambino, made by 
Andrew Humphries of the 
Royal College of Art. With 
marvellous economy, good 
editing; and a first-rate script 
(too often a weakness in stu- 
dent films) this tells the story 
of -Martin, a desperately 
well-meaning student with 
Sandanistan sympathies, 
whose dad runs off with his 
girlfriend. It is fresh, sad and 
funny and made me wonder for 
the umpteenth time why, with 
such talent bursting out of our 
schools every year, we still end 
up with such garbage packing 
the summer schedules: 

Humphries may he one of 
the best, fcnt he is not alone. 
Michael Barber's The Swim- 
ming Pool is a superbly stylish 
twistrin-the-tail tfcrfflw which, 
in about four minutes, puts to 
shame most of ITVs Tales Qf 
The Unexpected. like Martha 
Fiennes* Migrants it has a paw-, 
erful sense of iricture-niakfcag: 
of exactly what should be on 
the screen, and where. R is a 
quality common to the Italian 
realists, the French nouvelle 
vague, and much British televi- 
sion drama of “the 60s,' Mncar^ 
when it seems to have become 
wholly unfashionable, at feast 
on television. **:*" 



duce a series which looked 
- quite as -cheap as Late Great 
, Britons. These programmes, 
which have been reconsidering 
various historical re pu t a tions, 
ending- last week with Oliver 
Cromwell, were made by Brook 
Productions and, presumably, 
were supplied to the BBC as 
part of the 2S per cent of inde- 
pendently produced material 
which the Government wants 
included in BBC and ITV 
schedules. There has been 
nothing much wrong with the 
historians involved or the facts 
imparted, but the single-pre- 
senter, single-set technique has 
looked starkly economical, UXe 
a post war Utility style 
approach to television. Yet 
nobody can blame the 
BBC. . .can they? 


David Puttnam: worthy 
hot nervous role 


7 have opposed 


the habit of 


reconstructing 


violent and horrible 


crimes m a manner 


which can have no 


bearing upon 


their solutions * 


When viewers express their 
yearning for "a proper play 
with a beginning, a middle and 
an raid,” what they mean is 
probably «™e*Mng very like 
“The ITV Play" on Sunday: 
Better Dags, by Robert Push. 
This tale of a Welsh widower, 
who saw his ambitious barris- 
ter son in Ms true light only 
after they started living in the 
same house in a posh part of 
Cardiff; was slqw, gentle, senti- 
mental and melancholy, but 
rather well acted. 

In particular G3yn Houston 
was perpetually watchahle as 
the widower, Edgar. Such a 
rformance makes 
you wonder what happens to 
actors such as Houston, who 
began with Jack Warner and 
Dirk Bogarde in The Blue 
lamp and played what seemed 
lfte an endless succession of 
policemen and doctors in cin- 
ema and television, but then 
disappeared, from my view, 
anyway, (bar decades. 


American 


The tricks used-by television tat 
trying to induce us to watch by 


pretending that we shall be 
offered real 


. rf nwna movies are 
both ironic and disgraceful. 
Ironic because the message so 
clearly implied is "cinema is 
superior to television:" dis- 
graceful because of the dishon- 
esty involv ed. O n Saturday 
August IS, ITVs billings in 
both TV Timer and the 
national press included some- 
thing called Drive bt Mode. 

That phrase dearly s u ggests 
a real film, since Americans do 
not “drive in” to watch any- 
thing else. Moreover, at the 
head of the billing. TV Times 
printed its “Film” logo, the 
word being contained within, 
sprocket fades, thus reinforc- 

ing the message "This is real 
cinema.* In fact the work on 
show was a 15-yaapoZd Ameri- 
can television' programme, 
called Satan's ScftooI FOr Girls, 
which is dismissed in "EaHt 
well's Television Companion” 
as a “lunatic farrago." Leslie 
Halliwell was, for many years. 


chief buyer of 
material for ITV. 

« • • 

Shwa the. beginning of Crime-. . 
watch 1 have opposed the nasty 
habit of reconstructing for trie- 
vision violent and horrible 
crimes in a manner which can 
have no bearing upon their 
solutions and for which there 
is no apparent reason other 
than the buflding of Ug rat- 
ings. The fear of crime which 
pollsters discover nowadays, 
particularly among the elderly, 
appears to be out of all propor- 
tion to the likelihood of an 
farifvidual, getting Jmrt^akLR : 
seems possible that this fear la 
increawd. if not instigated, far 
more hy. such. factual perils., 
such as Crimewateh than by 
fantasies such as The 
Equalizer. 

But perhaps Crmetaitch File 
(BBCl, Wednesdays) could be a 
solution. Last week's pro- 
gramme, The Railway Mur- 
ders.” did not aim at getting 
the public to help solve a 
crime. It was, rather, a recon- 
struction of a case - tan 
John Duffy, who had raped; 
murdered . three women — 
which had. for a long time,, 
been sub judice. There have 
been many crime reconstruc- 
tion series, those of Edgar 
Lustgaiten to the present day, 
ami this was a more than usu- 
ally competent example. The 
thing fo do, surely, is to sepa- 
rate such reconstruction from 
tin Tbfice 37* notion of getting 
the; viewer to help the police, 

fo that those who enjoy watch* 
ing, crime reconstructions can' 
do so, and those: Who want to 
help the police without any 
such reconstructions can also 
do act. . - 


There is a bizarre touch of 
genius about the television 
commercials for a beer called 
Miller Lite. The first to claim 
my attention began with an 
all-grey shot over the nhenidgr 
of a pigeon mid the words 
“Bow, bow. bow” (1 think), fol- 
lowed by the message deliv- 


ered^ byj* number of young 


men: “To all you out there, 
with your heavy lives and your 
heavy beers. . and ended 
with the punch line: “Miller 
Lite: it atari heavy." 


r f "The new commercial 
" a opens with tiie pop - 

Jr song The Road Is 

-M. Long " which starts 
on'a moaning h armon ic a and 
moves to a vocal about a road 
“with many a winding turn.” A 
young man with a prize- 
fighter's face and a Mg smite 
picks up a little old lady and 
carries her across the road; 
joi ns in a Ba m* of basketball: 
marches into a pub, throws Ms 
hat on the bar, and gets served 
ahead of all the other thirsty 
customers. The punch-line of 
the song and the commercial is 
“He ain’t heavy, he’s my 
brother.” 

1 suspect that this advertise- 
ment comprehensively breaks 
the spirit of the roles govern- 
ing alcohol promotion, with its 
references to strength and 
Spurt, but technically it is a 


superb of fflm Tan king- In 
‘ * *' ( four Joca- 


It is difficult to behove that the 

BBC itself would dare to pro- 


60 seconds R uses 

titons, three mixes and 18 cuts, 
yet it fads wholly relaxed. The 
story line is unpredictable but 
immensely strong; and it has 
that rare quality: “repeatabil- 
ity.” Dow it seQ beer? Who 
knows - 1 for one have never 
tasted Milter Lite. 


Christopher Dunkley 


Music in the Usher Hall 

EDINBURGH FESTIVAL 


Apparently undiscouraged by 
an almost empty Upper (facte 

- where have all the students 
gone? does the Festival’s pric- 
ing-policy need readjustments 

- the USSR State Orchestra 
and the Swedish Radio Sym- 
phony have been doing their 
best in the Usher Hall, and 
were warmly received. The 
stamp of Yevgeny Svetlanov 
on the Soviet orchestra is-, 
plain, for he has been conduct- 
ing them for some 23 years; 
young Esa-Pekka Salonen, is a 
more recent recruit to the 
Swedish forces, though he 
seems to have tbVm in fiend. 

1 heard Svetlanov’s third 
Festival concert, which like the 
other two was devoted exclu- 
sively to Russian music. Pre- 
sumably the flashy little 
encore-pieces at the end 
showed off the orchestra’s 


proudest virtues: tight ensem- 
ble-playing by the separate 
instrumental groups, gleaming 
attack, roof-raising volume. 
Nothing more was needed for 
Svetianov’8 own piece in the 
announced programme, a 
Rhapsody called “For his Six- 
teenth Birthday.” One first 
supposed it to be a tribute to a 
son or nephew, but on the 
musical evidence (naively 
exotic in the popular Russian 
vein) it seemed more likely to 
be a work of the composer’s 
own sixteenth year. 

Those qnaint exercises 
seemed to confirm what the 
performances of Chaikovsky's 
fantasy “The Tempest” and 
Skryabin's Second Symphony 
suggested: that the USSR State 
Orchestra is something like a 
brilliantly 
band of distinct. 


sections - strings for passion- 
ate articulation (strictly regi- 
mented), woodwinds for evoca- 
tive colour, brass for 
aggressive thrills. The trum- 
pets and trombones always 
retained a strident edge, obvi- 
ously deliberate, and found it 
hard to melt into the back- 
ground when accompanying. 
In music scored just in that 
way the orchestra dazzles; with 
subtler scoring it can sound 
inflexibly bright. 


That was often the effect In 
their well-practised Skryabin. 
The composer’s piano music of 
the same period trades upon 
far F gfitPT- touches and more 
chiaroscuro than we heard 
here, and we were more often 
aware of one orchestral section 
after another being wheeled 
into action *fian of a continu- 


ous symphonic texture. The 
obbligato bird-song effects in 
the central Andante were so 
crisp and emphatic that the 
real music slipped by almost 
unremarked. Chaikovsky’s 
“Tempest” fell into discrete, 
vivid sections too, seeming less 
of a coherent whole than it can 
do. Nonetheless, the Russian 

players’ Caching * rmnmnnfi of 

their native idiom offered 
rewards not easily matched by 
anybody else. 

Salonen and the Swedish 
Radio Symphony offered 
Schoenberg’s Expressionist 
monodrama Brwartung, with 
the soprano Karan 
and Stravinsky’s Bite 
Spring. For all Salonen's : 
with vivid sounds, Bruxtrtung 
was a remarkably mild offwi* 1 
- mostly quite lucid, but also 
quite tame. 


A proper hell-for-leather 
attack was saved for the Rite. 
Though Salonen dwelt lovingly 
upon a few slow passages, 
often setting their elements in 
intriguing and unfamiliar 
relief, sound and fury domi- 
nated. There was plenty of 
expert playing, but the full 
effect of relentless ritual needs 
much steadier building and 
firmer holding-back than Salo- 
nen managed. Almost every 
violent section accelerated as it 
proceeded, losing tension even 
as the bombardment grew. The 
“Dance of the Earth” at the 
close of the first Tableau left 
no room for anything in the 
second part to top it a clear 
case of ejaculatio praecox, I 
thought. 


David Murray 



AMffrtrMufr 

Sara Kestehnan and Lorcan Crauitch in Bussy d’Ambois by George Chapman, 
which opened at London’s Old Vic last night 


Glass in a new light 


ha one of London’s biggest 
record stores, discs of FmUp 
Glass’s music nestle an the 
racks of “New Age” artistes, 
alongside the likes of Harold 
Budd and Robert Fripp. He has 
triumphantly escaped from the 
ghetto of the avant garde, and 
has done so by attracting a 
new public from the fringes of 
the rode world. 

His recent work is an artful 
combination of chic cultural 
alhisians — in *fife cross-over 
age it’s pr e tty smart to build 
an opera around Einstein, 
G handi, or a hermaphrodite 
monotheist Pharaoh, even bet- 
ter to adapt a piece of Doris 
Lessing sci-fi, underpinning it 
with easily assimilable music. 
To generations that take the 
albums of Talking Heads or 
BrlanEnb in their stride. Glass 
presents no problems. 

. But then neither would 
recent Stockhausen, though 
one could argue that the Amer- 
ican’s dramatic instincts are 
rather more convincing than 
the West German’s; Glass's 
unique and sHTi burgeoning 
popularity, and Ms knack of 
bridging two often disjunct 
musical worlds, needs explain- 
ing. Opera on the Beach is 
described as “Philip Glass on 
Ms New World of Music Thea- 
tre," and promises that expla- 
nation. R doesn’t deliver that 
promise, but it is an easy, 
informative read, lucidly put 
together and edited by the New 
York Times critic, Robert T. 
Jones. 

There is a concise piece of 
autobiography to begin, 
sketching in. Glass's early life, 
his studies in Paris with Nadia 
Boulanger, Ms first forays into 
fringe theatre in New York and 
the early minimalist scores, 
before the genesis of the three 
operas that made him the hot- 
test pr o p erty in contemporary 
music theatre is detailed. The 


tone is remarkably free of mal- 
ice: along the way Glass must 
have encountered considerable 
hostility and made not a few 
gnemipg yet there are no did 
semes to be settled in print 
Opera on the Beach reprints 
the librettos of Einstein on the 
Beach, Satayagraha and Akhn- 
’aten, and gives the s alient fea- 
tures of the musical organisa- 
tion of each of than. Robert 
Wilson’s part in the creation of 
Einstein is thoroughly 
acknowledged - it is just as 
much “his” work as Glass's — 
but in the later works the col- 
laborators have become pro- 
gressively less important. 
Glass is evidently a fast 
learner, and in that, one sus- 
pects, lies part of the secret of 


OPERA ON THE 
BEACH 

By Philip Glass. Edited 
by Robert T. Jones 

Faber. £17 JO 


Ms success. His preparatory 
work for both Satayagraha and' 
Akhnaten appears to have been 
impressively thorough: he 
immersed in the li fe of 

■Gandhi and the history of 
Ancient Egypt to such extents 
that the composition of the 
music almost became a subsidy 
iary consideration. Glass’s 
operas, one realises, are cun- 
ning cultural packages, 
adroitly assembled, in which 
the music is but one element 
- a Wagnerian Gesamtkun- 
stwerk for the Global Village. 

Why then does his work, evi- 
dently so thoroughly profes- 
sional, arouse such hostility in 
some quarters? In one sense 
the problem is not Glass’s fault 
but lies with the ways in which 
the music industry, from opera 
houses to record companies, 


will always take the line of 
least resistance and maximum 
profit. An opera house that 
commissions a Glass opera will 
guarantee itself good audi- 
ences, and be able to pat itself 
on the back for supporting con- 
temporary opera; it would 
almost certainly recoil in hor- 
ror from the suggestion that 
instead it commissions, say. 
Nano or Garter. In such a way 
the Glass idiom becomes tire 
norm for contemporary opera 
- accessibility is everything, 
and those who have bewailed 
the crisis of modernism for 
most of this century can see 
their alienation vin d icated. 

In this respect Jones’s intro- 
duction to Opera on the Beach 
is revealing: he admits to a 
thorough dislike of most con- 
temporary ' music and is wor- 
ried by the apparent gap 
between it and the audience. 
Glass and his minimalist con- 
temporaries, Haley and Reach, 
offered him a personal way 
back - “Perhaps in simplicity 
was an escape from complex- 
ity. . . No one composer 
invented this new music. It 
was an eruption of the times, 
an inevitability.” 

The recent success of John 
Adams’s Nixon in China shows 
that the triumph of the bland 
is not confined to Glass, and 
that the public far this music 
is large. But it is a different 
public from the one which sup- 
ports the standard operatic 
repertory, though that matters 
not at all to the opera-house 
managements, which can see 
their houses regularly filled. 
The gap fa still there: Glass has 
not converted the non-believ- 
ers, but filled a vacuum, tem- 
porarily at least, while the 
mainstream of contemporary 
composers who want to write 
operas are starved of support. 


Andrew Clements 


Travciiinii <>n 
Business in Italy? 


Enjoy reading y our cotnplimentary 
copy of - the Financial Times when 
you’re staying. • • 

. „ . in Milano at the 


Diana Majestic, Duca efi Milano, Hotel 
Exccllsior Gallia, Hilton Hotel, Hotel 
Mtebriaa^do* Hotel Palace, . Hotel 
Principe diSavoia . 





ARTS GUIDE 


August 19-25 


THEATRE 


Too Clover By Buff (Old Vic). 

A flntng Gogolian production 
by Richard Jones of Ostrovsky's 
Dbny of a Scoundrel in an old 

Rodney Addend version, with 


A m sterd a m, S tadrt s d>ouwbu rg. 
The Bn gHitk^iaiiMng Theatre 
bf Amsterdam in Agnes of God 
by John Ptrimeter. directed by 
Biyce Pederson foot Son ar 

Mon). (24 23 II). 



card faooktugi aH 1821). 

_ Virtue (GarrickX Transfer 
of King’s Head revival of early 
INoel Coward, seme period bat 
leeaar vintage than Hay Fever, 
but worth Bating. (339 6107). 

SoufaTadfie CPtinoe of Walad). 
Average, traditional revival of 
the greet Rodgmand Hammer- 
stein rnnticai, with Gemma Gra- 

ven fatting to wash the barttonal 

Biwlla Hah- 

(8305809). 

The Wwnt oM of the Opera (Her - 
Majesty**), Spectacular, emotfoa- 
ally eh»niy^»| P* f wi Ma fa-el 
■by. 


cards 379 61&V2eO 


2244.* 

7200). 

Femes CShaftetimzy). Bartha 
KJtt ana WUcent Martin now 
decorate Mike Ockreot’s strong 
revival of Sondheim's 1971 musi- 
cal. in which pb&oned marriages 
nearly tmtamtoe an old bun 

league renhlra to adeemed thee ■ 
tre. (879 S38fi). . 


Bapgood (AldwychX New Tom 



Naur York 

Cats (Whiter Garden). Still a 
sett-out. Trevor Nunn’s produc- 
tion Qf TJS. Eliot’s children’s 
poetry set to music Is visually 
startling and cbcreogrephlcaHy 
feline. (239 6283). 

A Chorus line (Sbnbert). The 
Imgesbnumlng musical in the 
US has not only s upporte d 
Joseph Popp's Public Theater 
for eight years but alao updated 
the musical genre with its back- 
stage story in wUch the songs 
are used as auditions wstw thwi 
wtmiHwmi. (239 6200 ). 

Ice MMarides (Broadway). The 
magnlfUamt spectacle of Victor 
Hugo's majestic sweep of history 
and pathos brings to Broadway 

)l>wnn« In pn yptr y otrf HnamllL 

(2396200). 

Starlight BxgfW (Gershwin). 
Those who saw the original at 
the Victoria in London wQl 
bandy recognise its PS incarna- 
tion: the skaters do not have 
to go round the whole theatre 
but do get good enwrim an the 
sppumteip stags with now 
bridges and American scenery 

r »«*r frnm h x- l fr u y wt 

pop rnnrir and trumped-up, dBy 
plot. (588 6510). 

Mb and My Girl (Marquis). Even 

if the plot turns aa framcniixz)- 
iaytfpygmafiaa, fids Is no clas- 
sic, with forgettable songs and 
dated taadexmes* in a stags fnB 
of characters. It has nevertheless 

proved to be a durable Broadway 


hit. (947 0033). 

M. Butterfly (Eugene O’Neill). 
The surprise Tony winner for 
1968 Is a somewhat pretentious 
and obvious meditation on the 
true story of the French diplomat 
whose long-time mistress was 
a mate Chinese spy. (246 0220). 
Speed-the-Plow (Royals). David 
M»maf applies fifa WHnj 
and ear for the exaggerations 
of American language to Holly- 
wood, in this screamingly ftmny 
and well-plotted expose of the 
film Industry. (239 6200). 

Stranger Here Myself (PubUe). 

AwgnHwi Bro w p H iftw u HB two 

decades of Kurt Weill’s i 
in a one-woman show < 
the composer's careers in ! 

Parts and New York. (096-7100). 


Tm Ml dl raH w flfwiiwlg dtt nl^ r 

Opera House). The touring com- 
pany of the international hit of 
last season brings to Washington 
the historical sweep of Victor 
Hugo, to iwude anrf an In ate . 

tent cont e mporary beat. Ends 
Oct 15.(264 8770). 

Sleuth (Eisenhower). Stacy 
Reach and Maxwell Caulfield 
star in the mystery pitting a 
writer against a mild-mannered 
travel agent who’s stolen his 
wife’s affections. (254 3679). 


Tokyo 

Ittktgi Nob (Sensed! Asakusa 
v«nnnn Temple). Japan's ancient 

|>nd i^f nfrwte th witriral flyf ftip n 

takes to the open air to summer, 
with special performances by 
torchlight in temple compounds 

that always attract large crowds. 
A Nab play and a inter, 
hide (kyogeiO form the pro 


gramme for tMs perfarmace by 
the Kflnze Noh School at Tokyo’s 
most famous temple. Thursday 
only. (842 5311). 

The National Theater iff the Deaf 
(USA) with the Japan Theatre 
for the Deaf (Sunshine Theatre, 
Ihebnkero). Worth seeing even 
by people who can hear. Ends 
August 28.(987 4369). 

The Sound of Music (NHK Hall). * 
Touring production fin English) 
of the ever-popular and oh-so-san- 
thnental Rodgers and Hammer- 
stein musical with Pat Boone's 
daughter, Debbie, as *fi» singing 
Marla van Trapp. Ends August 
31.(237 9000). 

Idamante CNakano Sun Plaza). 
Spectacular but bland Japanese ' 
musical based on Mozart’s Ido- 
meneo and starring pop idol 
Masahiko Kondo (Machi). The 
production is by kabuki show- 
man Ichikawa Ennosnke, aided 
by the design team that made 
his Super Kabuki production, 
Yamato Takeru, such a success. 
Ends August 24. (379 2609). 

Opera- za no Katjtn. better known 
as The Phantom erf the Opera 
(Nissei Theatre). Japan's leading 
musical company, Shiki. acquits 
itself well to what is a virtual 
carbon copy of the London origi- 
nal. The Japanese translation 
is often awkward, but Andrew 
Lloyd-Webber’s gift for musical 
pastiche, Harold Prince's roman- 
tically evocative staging and 
Maria Bjomson's stunning sets 
and costumes make for an enjoy- 
able evening. (503 3111). 

Lm Mis&ubles (Imperial Thea- 
tre). This ftU wiiw musical adap- 
tation of Victor Hugo's novel 
of the Paris barricades has 
returned to Tokyo fo r ano ther 
four-month run. 7777). 






\ 


Britten and Schubert 


ELIZABETH HALL 


The Sooth Bank mini-festival 
of Schubert and Britten turned, 
up an oddly divided concert on 
Monday. Considered in a rumi- 
native sort of way, Wmterreise 
and Britten’s last string quar- 
tet might seem to pair well (a 
natural programme for the 
recent “Endgame” series); but 
the Endelllon Quartet were 
determinedly ruminative, like 
the pianist Markus Hinterh&u- 
ser in the Schubert cycle, 
whereas the young baritone 
Andreas Schmidt was a model 

Of gDOd taste 

literalness. No suggestive com- 
parisons were prompted. 

In the long-studied EndeDion 
reading Britten's op. 94 seems 
wilfully private music, laden 
with significations which out- 
siders can only guess at. The 
spare string-writing is exqui- 
site, but refuses to expand: its 
nodes are silent suspensions 

and small, spidery turning s — 

not the stuff of overt drama, 
nor readily accessible to any- 
one unfamiliar with the Brit- 
ten oeuvre that went before it 
For initiates, this performance 
offered continual unemphatic 
subtleties; it is an open ques- 
tion whether a bolder silhou- 
ette for the work would incur 
real losses. 

Schmidt’s well-instructed 
appreciation of the great Win- 
terreise cycle (be is a Fischer- 


Dieskau pupil) was not 
unsubtle, but it was terribly, 
bland. In general his tempi and 
phrasing were irreproachable; 
and yet no salient change of 
thought or heart within a sin- 
gle song was registered in his 
tone or Ms vocal gait His rare 
efforts - as in the unavoidable 
wrenches of “Hast," or his 
placid cries of “Mein Here!" - 
sounded like surface histrion- 
ics. A sense at development 
was sorely mistral His li g ht , 
attra c tive timbre was secure in 
middle-range music, thinly 
stretched in the lower reaches 
and in quick passages, brittle 
at the top. He has still to learn 
how to use consonants to 
e xpr es sive effect 
Hinterhfiuser was a vital 
partner to Brigitte Fassbaender 
in her searing account of Win- 
terreise last year at Hohenems. 
This time he was careful not to 
loom over Schmidt’s lyrically 
innocent version, but again 
and again it was he who 
exposed - with unassertive 
tact - the crucial turning- 
points that the singer left unre- 
marked. 1 was not persuaded 
that justice can be done to the 
cycle by making ft an exercise 
in graceful vocal utterance 
with all the deeper intimations 
entrusted to the piano. 


David Murray 


Royal Philharmonic 

ALBERT HALL, RADIO 3 


The poetry of Byron, or at least 
its various musical treatments, 
was an obvious thematic 
thread to be woven into the 
present literary Proms in the 
poet's bicentenary year. The 
season is not including the 
whole of the most ambitious 
score bufit around Ms work, 
Schumann’s incidental music 
to Manfred, but Berlioz’s Har- 
old in Italy has been per- 
formed, and the main work In 
the Royal Philharmonic 
Orchestra's programme was 
Chaikovsky’s Manfred Sym- 
phony. 

Vladimir Ashkenazy con- 
ducted the work with the same 
orchestra last season, and to 
tyiat impressive account he has 
added father d ramatic tough- 
ness, particularly in the outer 
movements. The RPO’s com- 
mand of the score continues to 
the scherzo, 
sky at Ms most pictur- 
still seems loss delicate 


work coheres, with or without 
knowledge of its programme 


Manfred had been prefaced 
-with Richard Strauss, rich- 
toned, muscular Strauss, in 
which fell-blooded emotion and 
saturated textures were the 
distinguishing marks. Neither 
of the works - the Dance of 
the Seven Veils from Salome 
and Metamorphosen - is con- 
ventionally conceived in that 
way, and the passion of the 
Dance, romantic, Rosenkava- 
lier-hke warmth rather than 
nervy, expressionist sensuality, 
did not totally convince. But 
such an open-hearted Metamor- 
phosen, in which every contra- 
puntal line was folly freighted 
with intensity and each rhyth- 
mic profile etched wife fierce 
clarity, was absolutely compel- 
ling. 


and more prosaic than it 
might, as if Ashkenazay mis- 
trusts music of such simple 
delicacy in such a rigorous 
symphonic context. Even the 


In both Strauss works, as in 
the symphony, the RPO played 
with a distinctive pungency; if 


episodes of the finale pro- 
ceeded with an inevitability 


that escapes less comprehen- 
sive performances and seemed 
bom of a conviction that the 


Ashkenazy's tenure as the 
orchestra’s music director 
brings about a genuine change 
in its character ~ away from 
refined detachment and 
towards unbuttoned commit- 
ment - its position in London 
will become quite noteworthy. 


Andrew Clements 


Edinburgh Fringe 


Hull Truck have come to the 
Edinburgh Fringe mob heavy 
this year with five productions, 
two of them world premieres. 
They eased themselves in with 
September in the Rain, written 
for the company by John God- 
ber when he arrived as artistic 
director in 1984. 

t is a sentimental two-hander 
about a Yorkshire couple’s 40- 
year love affair with Blackpool 
which gives sentiment a good 
name. OK, so you can virtually 
make up the dialogue for your- 
self as Andrina Carroll rhapso- 
dises about the sea air as the 
couple arrive for their holiday. 
From then on all the seaside 
postcard topics, from the idlo- 
syncracies of landladies to 
undressing on the beach, get 


their airing, but it is done with 
gentle 


such gentle niceness that if a 
couple quite so uncomplicated 
as Jack and Liz could never 
exist, it’s the world's loss. 

He is a miner, silent and 
unemotional, but quick to 
anger; she a twitterer. and a 
bit of a goer. What gives the 
play its power is the sudden 
storms that rise between them 
and also the under-playing of 
>ics - what happened to 
; just how sick is 

Jack? 

There Is a perfunctory 
attempt at time-passing, with 
Andrew Dunn never quite sug- 
gesting that he was ever young 
while Andrina Carroll fails to 
age. But this is all about mood, 
and as a humorous, symj 
th fttic vision of the 


sores of the poor it could 
hardly stand more subtle treat- 
ment Direction is by Neil Sis- 
sons and it will fill the ball- 
room at the Assembly Rooms. 

In the same venue try and 
catch Victor and Barry Say 
Goodbye. These Brylcreemed 
foals ran the Kelvinside Oper- 
atic -Society with, well, not 
exactly an iron hand. Nor a 
totally limp wrist The attrac- 
tion Of the spoof is that the 
rampweftft Js kept g enteely at 
bay, just No-one questioned 
whether the Western Brothers 

ehareri the game bathr oom cab- 
inet and there are enough 
merry quips in this musical 
reverie of life on the right side 
of the Glasgow tracks to keep 
Aunt Maggie happy. 

It is hard to be mordantly 


witty at 11 in the morning. I 
doubt if 


even Dorothy Parker 
managed it So warm applause 
for Susanne Rock, who has 
built a one-woman show out of 
the life, both factual and fio- 

Mnnal of th e Manhattan flrrin. 

per. It naturally stresses the 
wreck beneath the bons mots, 
and is hardly one big laugh. An 
Audience with Dorothy Parker 
Is at the Playhouse Studio. 


A speech impediment down the 
line confused the name of the 
promising Australian jazz 
singer at the Assembly Rooms 
on thfa page yesterday. She is 
Sate 


Antony Tborncroft 



FINANCIAL TIMES WEDNESDAY AUGUST24 


FINANCIAL TIMES Nick Garnett on international pressures for mergers in engineering 


BRACKEN HOUSE, CANNON ST BBs T , LONDON EC4 P4BY 
Telegram* Flnanfiino, London PSA Telex: 8954871 
Telephone: 01-248 8000 

Wednesday August 24 1988 

The curse of 
specialisation 


The relentless drive for size 


MR KENNETH Baker, the UK 
Education Secretary, claims to 
recognise the case for a 
broader curriculum. Yet his 
deeds rarely seem to match his 
words. Earlier this year, follow- 
ing pressure from Downing 
Street, be poured cold water on 
the Higginson report on A lev- 
els. Professor Higginson and 
his colleagues had argued that 
16-18 year olds ought to study 
five subjects rathe? thaw the 
two or three customary today. 
This would have brought the 
OK more into lina with prac- 
tice abroad, made sixth for- 
mers mote useful to employers 
and increased the range of 
their own cultural and scien- 
tific interests. 

It now appears that the Gov- 
ernment's commitment to a 
broad curriculum is weakening 
even at the General Certificate 
of Secondary Education stage. 
Early specialisation can be 
avoided only if all pupils spend 
a reasonable time studying 
each of the main subject areas. 
Last week. Professor Jeff 
Thompson, the chairman of the 
science working party, argued 
that an pupils should follow a 
foil science programme at sec- 
ondary school leading to a dou- 
ble c er t ifi cate warninatinn at 

GCSE. This would provide a 
basis for a higher level study of 
science in fixe sixth form and 
beyond - and not Just those 
who intend to become scien- 
tists or engineers as adults. 


expect aU pupils to spend as 
much as 20 per cent of their 
time an science in years four 
and five, leading to a double 
GCSE certificate." He has 
therefore asked the experts to 
come up with a balanced sci- 
ence programme which can be’ 
coveted in 12% per cent of cur- 
riculum time, leading to a sto- 
gie GCSE certificate. 


Heavy demands 
The science programme out- 
lined by the working party 
looks stimulating and innova- 
tive. But because it involves 
the integrated study of biology, 
chemistry and physics, it 
would make heavy curriculum 
demands. For 15 and 16 year 
olds, up to 20 per cent of the 
overall -school timetable might 
be absorbed by science. Profes- 
sor Thompson concedes that 
the time allocation could be 
less in the final years, bnt only 
if more time was devoted to 
science at an earlier stage. 

The working party's esti- 
mates of the timetable 
demands of science look rea- 
sonable. Bnt they are .encoun- 
tering vigorous- opposition at 
the Department of Education.. 
Mr Kenneth Baker, file Educa- 
tion Secretary, in a formal 
comment last week said that 
the department doubted 
"whether it is realistic to 


; Bigger retreat 

! This is a bigger retreat than 
it might appear. It will be hard 
■ enough to condense biology, 
chemistry and physics into a 
‘ double GCSE, given that they 
are today regarded as three 
separate subjects. The notion 
that a worthwhile science edu- 
cation can be provided through 
the taking of one GCSE is 
laughable. Mr Baker fak 
officials are demanding file 

nwlntottTKia of an nnftatlwftfft . 

tory status quo: in the past stu- 
dents intending to specialise in 
arts subjects have tended to 
take only a token science O 
level. 

If the Government's commit- 
IfiPTlt tO A brown ^ I rrWTilllfi is 

to mean anything, it must 
attack the notion that 13 or 14 i 
year olds are ready to decide ; 
an their fixture careers. IT chil- 
dren of this age are allowed to 
opt for a stogie science GCSE, 
they win effectively be opting 
not to become scientists or 
engineers. Yet they are for too 
young to make such a derision. 

Mr Riiltpr OUgfat to w u m r a flurf 

all children take at least a dou- 
We GCSE in science and accept 
the timetable requirements 
indicated by the working 
party. 

The allocation of up to a fifth 
of the timetable to science 
would not constitute a down- 
grading of arts subjects. It 
would merely represent an 
honest admission of what is 
necessary if all children are to- 
got a balanced education. Ide- 
ally, such a balance would be 
sustained at the sixth form 
stage. The present practice of 
encouraging teenagers to study 
only two or three subjects dur- 
ing their final years has cre- 
ated an absurd schism in soci- 
ety: the numerate are barely 
literate and vice versa, ff the 
Government fails to tackle the 
pressing problem of early spe- 
cialisation, it will have foiled 
to reform the educational sys- 
tem. It is time C. P. Snow's 
"two cultures'* were merged. 


I f there was one phrase 
that outlived its relevance 
almost before it left tbs 
mouths of those who used 
it, "small is beaaOftzr must be 
it As a catefaphrase signalling 
the demise of the corporate 
giant and the rise of the lit fie 
man, it was fixe most hack * 
rayed line in the business fife 
of the early 1980s. 

The past few years have ren- 
dered the term meaningless as 
the biggest companies In a raft 
of industries from food and 
drink maimftrtaxring to domes- 
tic appliances gobbled up or 
elbowed out smaller and 
weaker compet it ors. 

Now a cratch of ownership 
changes in one of fixe last sig- 
nificant bastions of corporate 
fragmentation, heavy and 
medium engineering, is finally 

wmelgnfap the gTnn U IS bGSStt- 

fill tag to the rubbish bin. 

During the past lew weeks 
alone, big acquisitions in eleva- 
tor manufacturing, pumps, 
power station equipment and 
minting machinery have tilted 
market power towards the big- 
ger and tougher company - a 
trend gathering pace over the 
; past three years. The same 
thny h^Q hfr«m happening in 
construction machinery, food 

making equipment, paper mak- 
ing machinery to areas of 
the factory automation and 
materials imwdWnp industry. 

in BBgiwwrhig , clever tide 
znanufectnrera wiB always sur- 
vive. But the best of the bigger 
companies are becoming larger 
through acquisitions and joint 
ventures. They are seeking 
control of more markets ana 
broadening core product 
ranges in order to oner cus- 
tomers services and 

systems. 

One trend is a thrust by 
European companies into 
North America. Within the 
past month alone, Schindler, 
the world's second largest lift 
irmirpT - twa acquired tfw» tJS ele- 
vator interests of Westtugh- 
ouse. Another Swiss company. 
Suiter, Europe’s second largest 
pump company has bought 


Big International deals 

in 1988 


fOmory 

Komatsu (Japan). Dresser (US) merge US machinery interests: 
WestinQhousQ (US). AEG (W.Germany) joint venture fri rafl equipment 

March | 

Wastinghouso, Siemens <ytGoemany)&nt venture in fectoy equipment J 


PtotitefUK). Detroit Diesel QJS) joint venture in US In engines. 
Asea-Brown Boveri (Swltz / Sweden) Westinghousojok* ventures in US 
power supply equipment 


MAN (W.Germany) buys Alsfrom (France) dtesel interests. 
John Deere (US). Hiachi (Japan) Joint venture in excavators. 


Asea-Brown fimr/Joint venture wHft ki turbines. 

Hsd&efowger (W.Getmany) buys Haf7feG^p#ifcs(US)priritfng machinery. 
Scfurxfi&r(Swttz)buys Wosttnghousam interests. 

August 

Sbfeer<Swftz) buys Bingham QJS^ pumps. 

Talks between General Electric (USX Semens (W G ermany) 

Mh power engineering. 


'Leighton Morris 


Alfa Laval of Sweden in food 
ml drink malting equipment, 
spurred APVs purchase of 
Ba k e r Bakins to the UK and 
P inriiac, a Danish dairy and 
brewing equipment supplier. 

Such deals follow last year's 
most spectacular joint venture 
in Europe: the merger of Asea 
of Sweden and Brown Boveri of 
Switzerland. This created a 
group with combined sales of 
$18bn - a giant that, through 
sheer size, has unsettled the 


RiTighem, aw important Ore- -rest of Europe's heavy engi 
gon-based pump Tnan n f a r t n rBr. netting companies. 


Iran and Iraq 
prepare to talk 


WITH THE GULF ceasefire 
which took 

apparently still holding despite 
repeated accusations of bad 
faith by both sides, Iran and 
Iraq embark tomorrow on an 
attempt to salvage what politi- 
cal capital they can from the 
wreckage of their eight-year- 
conflict. 

The first meeting in Geneva 
between Mr All Akbar Velay- 
atL the banian Foreign Minis- 
ter, and Mr Tarfq Aziz, his 
Iraqi counterpart, is .bound to 
be acrimonious. Achieving a 
comprehensive settlement 
between the two countries was 
always going to be an infi- 
nitely more difficult task than, 
agreeing a truce — one which 
Jar Javier Perez de Cuellar, the 
UN Secretary-General who is 
presiding over the talks, has 
already acknowledged will 
have to be measured in years 
rather than months. 

Nevertheless, the feet that 
the two governments are sit- 
ting down together so soon 
after the ceasefire is a positive 
sign and one that in time coold 
be boot on to create greater 
Stability. Each has, after all. 


ceasefire outcome which, after enor- 
: Saturday mous death and destruction 
ng despite and Iraq's Illegal use of chemi-’ 
is of bad cal weapons on a large scale, 
Iran and merely reproduces the status 
ow on an quo ante beUnm. Baghdad's 
hat poUti- crowing, moreover, is most 
from fiie unlikely to make Tehran any 
ight-year- more m a l l e a bl e in the Geneva 
talks in reality, fi ds futile con- 
in Geneva flict has produced neither vic- 
ar Velay- tor nor vanquished, and fixe | 
ign Mjxns- peace settlement should reflect 
Aziz, his that fact. 

.bound to The two main bones of con- 
hievtog a tent} on as the talks unfold are 
ittlement likely to concern the apportion- 
atries was meat of blame for the war (and 
! an infi- the attendant Issue of compen- 
taak than. satton), and fixe location of the 
me which frontier. 


During fixe same few weeks, 
Harris Graphics in the US has 
been absorbed by West Ger- 
man p rinHw gr machine maker 
Heidelherger Druckmaschinen 
which already rfafaw to be the 
world’s largest supplier. 

Two huge electrical compa- 
nies, Siemens of West Ger- 
many and America's General 
Electric have opened talks on a 
possible link-up in power engi- 
neering. This follows the 
merger of Siemens factory 
automation interests with 
those of Westinghoose. 

All this fits in with a broader 
move towards bigness. For 
every huge acquisition by a 
European company in the US 
there has been a string of own- 
ership shifts within Europe. 
Some, though by no means an 
of these involve cross-border 
purchases and alliances. 

The contested takeover of 
Tfldm&ankme, a factory auto- 
mation 4 fl | n1| i n M»ti* maker, by 
Schneider, a fellow French 
company, was part of this. So, 
too, was the takeover by MAN 
and MTU to West Germany of 
the diesel business of Atethran 
of France. The fierce battle 
between Britain's AFV and 


to industries with thousands 
of companies, these trends are 
by no means universal. For 
nwJrfm* tools, the Eu r opean 
directory alone is 160 pages 
long with an average of six 
machine tool companies per 
page. The number of valve 
muses is so huge it is proba- 
bly ungueseahle. 

Even when some of these 
sectors are home to a big take- 
over, it often leaves little 
im p r e ssion. Last year’s pur- 
chase of Bnschman, the US 
conv ey or malar, by Germany's 
Demag hardly made a mark to 
the heavily compHrtinentalfeed 
conveyor industry. Bnt in 
those sectors where there hove 
always been a few large suppli- 
ers as well as a welter of 
medium sized and small com- 
panies, power is being increas- 
ingly concentrated in the 
hands of fixe bagger and richer. 

. Opport un ism is one reason 
for mis, and so Is a self-reinfor- 
cing momentum created out of 
a fear of being left out But a 
lot of corporate boards sow say 
that having critical mass is 
wR a mti a i to the ability to com- 
pete. You have to be a foil line 
supplier of a complet e range of 


equipment and yon must have 
the ffwwofad muscle to scoop 
up loss-leading contracts. If 
you don’t have the mass your- 
self, then buy it or get a part- 
ner which has. 

The rush of purchases In 
North America has been partly 
caused by the relative cheap- 
ness of US companies - some- 
thing that has m ark e d acquisi- 
tions In many other industries. 
It is also sparked simply by 
companies costing un for sale. 
Westtoghouse, to particular, 
has sold off operations or slid 
them into joint ventures at a 
rapid pace - creating opportu- 
nities for others. 

However, acquisitions in 
North America have also had 
an underlying logic. Most have 
been earned out by companies 
desp e ra te to grow by gaining a 
solid foothold in the big US 
market, sometimes with a 
well-founded fear that if they 
do not bid for a company up 
for sale, a European, US or 
Japanese competito r wifi. 

A classic CTumpte of thla 

trend was the decision this 
year by Dresser of the US and 
Japan's Komatsu to merge 
their earthmovtog machinery 
manufacturing and distribu- 
tion operations in North Amer- 
ica. 

Between them, Caterpillar, 
fixe world’s largest producer, 
and Komatsu, the second larg- 
est, control 5 0 per c ent of world 
sales. Same estimates .suggest 
that this share wifi rise to 75 
per cent in the 1990s. Both 
companies have been adding 
products to their ranges 
through affiances. Just below 
these two giants, I fi tac fai, Flat 
and John Deere are fighting 
hack by setting np a series of 


crisscross deals among them- 


Academic 

freedom 


Observer 


UN secrecary-uenereu woo is „ coo 

presiding over the taika, has Kcsolntion 5>o 
already acknowledged will For the first of these points, 
have to he measured to yean provision has already been 
rather than months. made in UN Security Council 

Nevertheless, the feet that resolution 598, under which a 
fixe two governments are sit- ceasefire has been imple- 
ting down together so soon merited: as Iran has demanded, 
after the ceasefire is a positive an impartial body is to be set 
sign and one that to time could up to inquire into respansihzl- 
be bust on to create greater fly for the war. Mr Perez de 
Stability. Each has, after ail, Cuellar should establish this 
spent the best part of a decade without delay, and give it a 
trying to prove the other's file- brisk timetable to conduct its ; 
gitimacy- By agreeing to talk work: it is bound to report that i 


at foreign minister level, they 
have already taken the first 


Invaded Iran, although its 

let will be stitabhr quatt- 


step towards burying that spe- fled with considerable evidence 
time hatchet. of Iranian provocation. 

. r The border prese n ts just as 

Political disputes delicate a problem, specifically 

Aside from the question of the southern frontier which 
recognition, though, fixe pdfiti- runs along the Shaft alArab 
cal disputes between fite two waterway. Iran has said disetts- 


cal disputes between the two 
countries remain almost aa 
intractable' as they were when 
the war began. Both have undi- 


skrns should be based on the 
1975 ' Algiers accord, which 
places the border along the 


minishedrSSonal leadership thalweg, or the middle of the 
amhiKnng even if they have Shaft’s deepest c ha nn e l . Presi- 
been nwihta to foffll them by dent Saddam, however, who 
military means. Each is likely tore + uptteAl^^agr^nmit 


to see making concessions, to on tolerigon brfwe invading 
the other as a dangerous dis- JJ® 1 m la ? 0 > fe likel y to claim 


play .of weakness which could 
be exploited at a later stage. 

Mr Perez de Cuellar's task is Gao. . 
to persuade both governments The issne has imme nse, if 
thaTaKSmgii they wifi never aow largely sffmbobc, bnpoi* 
be brought to like each other, tance to bon* and the UN 
they eX have a leal interest would do well to remove it 
in achieving a durable peace temporarily from fixe argument 
rather than a settlement winch 

gives one side a short-term inte r na tional stewardship for 
advantass fixe Shaft at Arab pending reso- 

Irao's President Saddam totioncf its final status. A bor- 
Hnss3nha?bes£ swift to ctaj> 

acterise the ending of bostffi- not be allowed to jeopardise 
ties as a maiorvictory. This is the kmg-Magadtances for teal 


oya- the water- 
l access to the* 


an absurd 


for an peace in the Gulf. 


■JOHN JEWKES, who died 
last week aged 88, was a pio- 
neering student of the econom- 
ics of innovation and a zealous 

of I nd ividual ^ aca- 
demic freedoms. He loved to 
question the fecttxal basis 
the conventional wisdom; 
despite 21 years as a professor 
at Oxford, he did not fit easily 
into any school of modem Brit- 
ish economists, although Lto- 
nel Robbins was a close friend. 
His biggest study, of the 
sources of industrial inven- 
tions to the twentieth century, 
was launched in 1958 at a time 
when economists had shown 
httie Interest in fixe subject 
for half a century, bnt when 
they were becoming excited 
about the Importance of tedtud- 
cal ch ange for economic 
growth. 

- Jewkes thought that econo- 
mists should know something 
about the way to which techni- 
cal progress happened before 
they prescribed policies for 
its encouragement, and felt 
profoundly sceptical of the 
widespread belief that the 
large research laboratory was 
the ideal instrument for pro- 
moting invention. His condn- 

trinrwt that Haifa large aamp te 

of important industrial invw i 
tions lad originated outride 
such laboratories, and that 
encouraging a multiplicity off 
sources was the best way of 
stimulating innovation, did 
not strike responsive chords 
in British governments. Bid 
his example did help to make 
innovation studies and science 
policy fashionable branches 
of economics, even if the flow 
of empirical studies has been 
smaller than Jewkes would 
have wished. 

His work on Invention had 
been launched at the Univer- 
sity of Chicago, and Princeton 
also provided him with a home 
from home in America. 

Jewkes’s views were always 
better received in the US with 
its stronger tradition of free 
market economics and empiri- 


cal research. The institute of 
Economic Altehs, of which 
he was an eariy supporter, pro- 
vided h is most sympathetic 
smroimdlngs to Britain. His 
fierce attacks on economic 
pinpnfo g djd n o t h im 

to th« pnHcy jnalrfng 
meat — until it rjian p ptj tn 

fixe last decade of fob life. 

Jewkes belonged to the old 
British tradition of economists 
who described their findings 
inhidd, literate Enghsh-fSo 
successfully that Samuel Brit- 
tan’s headmaster once con- 
fessed he was the only econo- 
mist he could understand). He ■ 
did not share the modern inch- 
nation to algebraic conclu- 
sions. Nor md he believe that 
economists should devote so 
much effort to forecasting: 
nothing, be once said, baa 
done so much to lower the 

gfamfing nf gmnnmfafa i than 
their claim to be able to fore- 
tell the fixture. 

Nor (fid he sympathise with 
the modem pr eo c cupation with 
fixe quantity of their output 
concerned with the quality 
of Us writing, he once 
remarked that it was a pity 
that Fritz Machhxp had become 
so obsessed with has publica- 
tion fist, because be could see 
how the quality of bis work 
had declined. Machhxp, a true 
workaholic, used to say that 
it was a pity that Jewkes was 
more interested In gardening 
than to economics. 

He was indeed a keen gar- 
dener. devoted to improving 
his own garden and that of 
Merton College. This interest 
went with the other very 
Tgnptifch aspects of his charac- 
ter. his love of the English 
.landscape, its wildlife and its 

h rrfltifngw- Tn hfa latAf ya g y 

would write in a motor cara- 
van on the Wiltshire Downs. 

Not, perhaps, fixe image of a 
modem professor of econom- 
ics; bat bis concent for free- 
dom in every sense showed 
his affinity with older total- ’ 
htiiwi tswBBBbt, 



' They're painting the extra ■ 
lane for Sebastian Coe 

And its lack 

■ to less obvious accord Is the 
derision talran by tfr? Thtinrin. 
tional Relations Department 
at USE that in the coming aca- 
demic year its general semi- 
xxars8lk)uM no longer automat- 
ically be open to research 
students. Instead they will 
i require an invitation from a 
fecufty member to attend axxd 
, there win be restricted to one 
per feentty member par semi- 
nar. 

According' to Michael Done- 
■lan, who nms the seminars 
and w2xo confirmed the new 
appr oach , the reason is that 
"it is in the general interest 
of the department, given the 
enormous changes taking jdace , 
on the international scene, that | 
the staff shook! get together " 
and thump it an about." There 
would stiD be the nefcwcak of 
specialised seminars. 

The problem, pres u mably 
to be encountered when LSE 
reconvenes in October, is that . ’ 
the research students may not 
agree. There is nothing wrong, 
they fed. with intramural fec- 
ulty brainstorming, but they ’ 
regret assigning the popular 


general seminars, which fro- . 
ouently included good outside 
speakers, to this exclusive pur- 
pose; they also tend, not unrea- 
sonably, to feel that they . 
should be exposed as much 
as passible to the work-in-prog- 
ress and thinking of those at 
whose knees they are sitting; 
particularly when, to quote 
Mr Donelan quoting Bob 
Dylan, "the. times they are 
changin'”. 


And its tracts 

■ A grave andsskm from my 
list yesterday of notaobto Rho- 
desian expatriates Is, of course, 
Mr George Webster, professor 
of urology at Duke University 
in North Carolina. 


And scholars 

■ A British Rail worker, who 
d gng himself Q ufatPtas vapm, 
writes movingly in the latest 
issue of Modem Railways mag- 
azine of the perils of life as 
a BE guard. After a passing 
comparison with Kipling’s 
Tommy Atkins (who was “Sav- , 
four of Ts country” when toe 
guns began to shoot) he movBS 
on to horrors like the "Scotch 
Express," where “some downs 
are too drank to know what 
a ticket is, let aknxe show It," 

before nphr aMlng BR wumugB . * 

meat for denigrating their own 
staff. Publius Qninmtos Varus 
was a Roman general who 
committed suidde after Us 
army was destroyed in Ger- 
many in AD 9. Who says schol- 
arship is dying? 


Literacy 

■Domflsaysonwdhingabont 
the extent to which buyers 
of the Sun newspaper caxly look 
at the pictures that in spite . . 
of its cosrectiy tipping the first 
name of the royal intent sev- 
eral days ago, WOliainHIli 


not a single bet on Bea- 

Jurek Martin 


aloof from this 

there to a small-scale ian« 
rush. . 

to materials han^ir# &£ 

CStodustrialgaMstobft 

trucks, is bnfldtoe 

toant position. 
and Still, has for 

owned an oper^wfoft®^ 
and last year pnreha^d Wag- 
ner. the w 

automated guided 5 

gave notice tMs JOT ft 

wants to increase rtshg 8 

add-on products. 

large capital base, I ^ink P^. 

Linde,” says one lift truck com 
pany manager. 

BT in Sweden seems det®* 
iMtoad to meet this challeng e 
and other bag suppliers, socb 
as 7;.»nrfiip in the UK, ung irt 
have to follow suit to protect 
themselves. 

to pumps, (he acquisitMm 
Pmnpes Guxnard in France by 
iriotn S chanzlia and Becker 
and Weir's purchase of Mather 

and Platt in the UK to focusing 

that industry on a fewer num- 
ber of play era. With the take- 
over of Pledger in Germany by 
Dresser, there are now only 
five mqjar suppliers of pomps 
for power engineering- In the 
fierce three-cornered fight for 
the world’s paper making 
machinery market, Vabnet in 
Finland has been acquiring 
other European companies to 
give it a much broader product 
range in a move which has 
worried its two principal com- 
petitors, Beloit in tin US and 


But Komalsa’s plan to try 
and . hunt Cat down has 
recently come unstuck. The US 
company, once in deep trouble, 

fraftw pitting thp heat on 

its Japanese competitor. 
Komatsu's market share- in 
North America has actually 
fallen. The deal with Dresser 
gives Komatsu new mannfao 
fairing space in North America, 
extra distribution clout and a 
new lease of file in the world’s 
biggest market. 

Similar motives lie behind 
Schindler’s estimated 2500m 
purchase of Hie Westinghoose 
lift interests. This was 
designed both to reduce the 
Swiss company’s dependency 
on Europe and to attack the 
world's number one producer, 
Otis, on its home ground. 
North America, Before the 
acquisition, the VS accounted 
for only 15 per cent of Schin- 
dler's sales. In the same way 
Headelbergsr. which despite its 
$Llhn sales had no production 
plant outside Germany, saw its 
2300m purchase of Harris from 
AM International as a way of 
getting farther into the North 
American market. 

The same kind of thinking 
partly governed another big 
move in heavy engineering 
this year - the decision by 
Asea Brown Boveri (ABB) and 
Westinghoose to combine their ' 
North American power genera- 
tion and transmission busi- 
nesses into a pair of large joint 
ventures. The two joint ven- 
tures - in which Westingh- 
ouse has a 65 per cent stake - 
have tibn of sales and 1&000 
employees. Before those merg- . 
era, ABB was an outsider In a 


US power market which nLwTiV 

accounts for J2S per cent of 
world electricity consumption Germany's Vofth. 
and is dominated by General Even in agricc 
Bfeetrlc and tatestftighniiBft. menh where tfaer 


Another of Westingboxxse’s 
itoik — lumpin g its transpor- 
tation eq u ipmeartbnstnegses in 
with those of West Germany's 
AEG - was also motivated, it 
appears, by the desire to obtain 
some kind of critical mm« 
AEG itself ' is vow owned by 

TtewwliaJtot* - 

Tha usual arguments about, 
combining research, marketing 

MmR product Www iwrfA* wimp 

of these deals were the product 
of fear. Schindler was worried 
that someone else, like Koine of 

Finland or one of fixe big Japa- 
nese hit makers, would step in. 
Horst Slayer, Heldelberger’s 
safes director, says the com- 
pany was afraid that Harris 
would tell into the hands of 
Konxori, the rapacious Japa- 
nese printing machinery 
maker. Kotmori had made a 
substantial offer for Harris, an 
acquisition .which would have 

g ven Komori a production 
tihty in Europe. 

Percy Bamevlk, ABB’s chief 
executive, says the formation - 
of fixe North American joint 
ventures with Westinghoose 
gives the two companies more 
strength and ftaxOnUy to com- 
pete with the Japanese. In 
power engineering, Mitsubishi, 
Hitachi and Toshiba have huge 
ca pital bases technological 
capability. 

These deals across the. Atlan- 
tic are being, mirrored by 
increasing concentrations of 
power within Europe. The Mg 
UK and Italian- engi neeri ng 
groups appear to be standing 


Even tn agricultural equip- 
ment , where there has already 
been a Mg shakeout, changes 
are continuing. Deutz in Ger- 
many is slowly absorbing the 
Mercedes tractor division and 
oxtering a co-operation agree-, 
ment with Greenland, the 
Dutch maker of bailers and 

nfrnr w j nt p uwnt . 

It is in power engineering, 
though, that the E u ropeans are 
really getting shaken np. 
"Everyone is Miking to every- 
one eke. There is more of this 
going on in this indnstry than 
at any time before;” says Bob 
Davidson, head of the power 
engineering division of CSC in 
the UK. 

The merger of the techni- 
cally competent Asea with the 
larger hut weaker Brown Bov- 
eri, the prospect of a more 
open European market after 
1968 and the pressures of a 
cyclical industry are already 
having their e f fec t Alsthom’s 
purchase this year of the 
power equipment business of 
AGEC in Belgium wOl almost 
certainly be followed by other 


There is no g u ara nt ee fiiat 
all these realignments will, 
work. But if many do work, 
which type of company will 
lose as a result? Conventional 
wisdom says the losers will be 
those middle sized groups that 
try to fight it out head to head 
with the big companies, but 
with far smaller resources! 
This view is not yet proved. 
Bnt it will be tested during the 
next Mg cyclical downturn in 
w or ld wi de demand, whenever 
that comes. 


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FINANCIAL TIMES WEDNESDAY AUGUST 24 1988 


e 




be Government discus- 
sion paper on vUUn 
bousing 1 issued in July 
by Mr Nicholas Ridley, the 
Envi ronm ent Secretary. bofrUy 
trumpeted its commitment to 
preserving the traditional way 
of life in the British village. • 

"No one wants to see a typi- 
cal small village fW 

new suburban development or 
ribbon development 
out along country roads or 
haphazard scattered develop- 
ment In the countryside,” ft 
declared. 

But these sentiments will 
cut little ice with many of the 
6m people in England a nd 
Wales, 16 per cent of the total 
population, who live in about . 
10,000 villages or towns of 
under 5,000 inhabitants. Many 
small communities have 
already been swamped by new 
housing. 

The Government paper pro- 
posed the construction of 
entirely new villages in the 
coun tryside and the encourage- 
ment of housing 
to provide low cost honin g . 
This initiative, which has bad 
a m ixed reception, was partly 
in response to political pres- 
sure fmm Conservatives who 
are disgruntled over the despo- 
liation of their rural retre a ts. 

Under the present planning 
system it is difficult to prevent 



Development 


Ashfey AshwootJ 

Hatch Beancfrmnp , which feds thr e aten ed by too rapid expansion 


builders nibhWng away, at vil- 
lages with fin-in developments 
or what are virtually new 
estates on the outskirts. Unless 
a site is In the sacrosanct 
green belt or there is a specific 
reason against a particular 
project, the presumption is In 
favour of the developer. 

The development of the high 
speed train mid tie motorway 
have brought idyllic areas 
within the reach of the long 
distance co mm u t er. There has 
also been a big increase in the 
retirement population moving 
out of towns. The number of 
pensioners in -the English Lake 
District, for instance, has risen 
by 13 per cent between 1971 
and 1981, 10 times the national 
average. 

At the same time the 
run-down in farming has 
meant a darftiw in the indige- 
nous rural population. The 
number of Item labourers has 
dropped by a third over recent 
years. 

As the newcomer* from the 
towns move In to hew, high- 
priced homes, local young peo- 
ple cannot afford the price of a 
starter home. A report* from 
the Association of District 
Councils (ADC) yesterday calls 
on the Government to make 
more economic assistance 
available to create emplo yme nt 
in rural areas "and *i*o pro- 
poses schemes for cheap 
starter homes — with restric- 
tions that would prevent the 
original purchaser wdHng the 
home at jm inflated profit 

One such scheme was 


A built-up and 
unpleasant land 


John Hunt looks at the problems of villages 
threatened with commuters or retirement homes 


opened at Chipping Campden, 
Gloucestershire, with Mr BJd- 
Tey’s encouragement But the 
ADC says that ironically, the 
Government’s rigbt-to-buy leg- 
islation has since made these 
schemes hn poanHMr* 

The feelings of threatened 
villagers Is summed up in a 
parody of Goldsmith's poem. 
The Deserted Village, con- 
tained in a local appraisal by 
the people of Durweston, near 
Blandford Forum, Dorset It. 
expresses the fear that the 
local people and "Dorset** 
speech will be swamped by 
elderly strangers speaking an 
alien tongue. Such appraisals, 
now conducted by many vil- 
lages, are in effect consultation 
documents expressing the 
wishes and feelings of local 
people on planning matters. 

Durweston, a picture post- 
card village of thatched houses 
with a population of Just over 
300, can rfabw to have the 

developer at bay so far. At 
Batch Beauchamp, a dniflur 
village of 400 people and 200 
houses, 40 miles away near 
Taunton, Somerset, the picture 
is very different. 

For the past six years the 
parish council of Hatch Beau- 
champ has been fighting to 
Hmtt the level of new bnflding 
in its community of stone and 
slate houses huddled round the 


village shop and pub. The 
council negotiated with Taun- 
ton Deane Borough Council to 
establish a local plan that 
would phase in an acc eptab le 
amount of development over a 
10-year periopd. The plan Is 
now in its final stages - but 
more houses have already been 
buflt in the village than the 
plan allows for until 1996. Per- 
mission has just been given for 
further houses on another site 
and there are rumours at yet 
more 

The plan allows for a steady 
by 50 new dwellings 
up to 1996k an increase of about 
25 per cent But already 57 new 
houses have been built or are 
under construction *m«i plan- 
ning permission has been 
given for a further LL 

The new homes are in keep- 
ing with local architecture. But 
it is the speed of development 
and the possibility of being 
swam p ed by still more bnflding 
that wonies local people. Some 
two-bedroom dwellings started 
at £44^)00 but those now going 
up are £175.000 for a four-bed 
and £195,000 for a five-bed 
house. 

Mrs Jane Smale, vice chair- 
man of thp parish council, 
emphasises that the villagers 
are not against all develop- 
ment, but they do want, the 
expansion to be controlled. 


LETTERS 


Law according to Augustine 


From Mr Leo Bend. 

Sir, Is the point of Michael 
Dixon's article ("Legal eagles 
and other birds of ill omen," 
August 17), examining statisti- 
cal links between national pro- 
ductivity and the perce n tage of 
lawyers In « population, to poll 
lawyers’ tafia - or Is same- 
- thing morn interesting 


HI* siatistic*E«ufoatity is 


Mr Norman Augustine, chair- 
man of the Martin Marietta 
Corp oration. The independent 
existence of Martin Marietta is 
a lawyer's creation. Without 
“the double-pac man defence” 
(an attempted takeover 
defended by a bid by the target 
company ngntnot the bidder) 
and the fcghmB of lawyers and 
Judges Jt took to accomplish it, 
there would be no Independent 


Martin Marietta today. 

U the impHeatian ft that fMw 
kind of lawyers* activity is 
without economic value or — 
worse - wasteful, that is an 
Interesting point end I am sure 
we would all like to hear more. 

On the other hand, the asso- 
ciation between lawyers and 
economic decline may be a ran- 
dom one; or both economic 
decline arid the number of law- 


yers may be associated with 
some other variable. 

la short, do Messrs Augus- 
tine and Dixon know some- 
thing, or are the statistics Just 
for laughs 
Leo Herzel. 

Mayer- Broom & Platt, 

190 South La-Sal Te Street, 
Chicago, 

Illinois, 

USA 


No ill wind 


Landlocked 


S&v Yoa report yz 
that British Gas was obliged to 
writ* to all S.7M «Mte shwe- 
holdare to inform them of a 
. new ntmdntilon to tts board 
May L on behaK of the enve- 
lope industry, suggest that all 


pahSc companies adopt a&hflar 
danaes in their articles of asso- 
ciation? 

Peter Ventage. 

Mekoate limited. RuodoptBro- 
has. : 

Orange Mil ls, 

Wdr.Baad, SWJS ■■ ■ 


From Mr JB. BirsL 
Sr, “It has long been obvi- 
ous that fewer people are 
needed to produce Europe’s 
food. Now it is also dear that 
far less land needs to be 
fanned” (FT leader, July 26). 

In such circumstances, Is it 


in the national interest for 
there to be an artificially cre- 
ated shortage of building land? 
J3. Hirst, 

2 BoUy Park. 

Buby. 

near Leeds, Yorkshire 


Unprepared for 1992 


Batsmen battle on 


From Professor Peter Moors. 

Slr, Mr Peter Kronur com- 
plains that the royal baby was 
weighed in pounds and ounces 
(Letters, August 16). 

Your stock market report 
quotes Treasury 11% per cent 
stock standing at 102 27/32. Let 


us eitakst master de cimals , 
Sk. before we attempt, metrica- 
tion. 

Peter G- Moore, 

Principal. 

Loudon Business School, : • 

Sussex Place, ■ 

Regent's ParkNWl 


From Mr J.T. Joinings. 

Sir,. To redress the balance 
between fast bowlers and bats- 
men, Mr F. Holme suggests 
lengthening cricket pitches. to 
25 yards and designating the 
bowler's half a “no ball" area 
(Letters, Augdst 16). 


An altern a t i v e solution, and 
perhaps a cure for some dan- 
gerous current practices, is to 
label as “wides” all balls that 
pass over the wicket above 
bead height. 

J.T. Jennings, 

37 Albert Embankment, SEl 


‘ . Critical paths in conventional defence 


Fttm Mr Graham Leman.^ 

Sir, Professor Nefid (Lettew* 
August 19) has unfortunately 
missed the m»ln point (Letters, 
August 10). Weapons. as such 
cannot be either inherently 
defensive or inherently offen- 
sive In character. 

If each side is equipped vdth 
the same weapons “ whether 
tanks or pikes - those weap- 
ons can be used indifferently 
either to attack or to defend. If 
neither side has any tanks, a 


man with a rifle Is as danger- 
ous as a man in a tank would 
be. (Some years ago the Tanza- 
nian army, a light infantry 
force which had to walk every- 
where. successfully invaded 
Uganda and installed a new 
regime more . to Julius 
Nyerere'a taste.) 

It might be a bit difficult for 
us and the Russians each to 
persuade our own soldiers and. 
defence industries of anything 
as ambitious as Professor 


Nefld's "no tanhB**opt to a. For 
instance, for the foreseeable 
future tins Russians will con- 
tinue to administer a huge 
land empire. They may well 
think that they cannot do with- 
out tanks and armoured infan- 
try. even for internal security 
purposes only; and our gener- 
als would no doubt advise us 
that we needed these too, to 
keep the balance. 

A less ambitious attempt to 
limit the forest of war posed 


by these forces (perhaps by 
agreeing to limit their logistic 
capability, under verification) 
could be quicker and easier to 
agree, AH we need in the short 
term is some stabilising mea- 
sure just powerful enough, 
first, to relieve us of the threat 
of early decisive results; sec- 
ond, to torn the trends in con- 
ventional forces from a vicious 
into a virtuous spiral. 

Rwhimi» Twrwin 

U Shakespeare Road. W3 


‘A company has at least four stakeholder groups’ 


Prom Mr Andrew Campbell 

Sir, Martin Taylor argues 
that “central managements, 
job is to add value for the 
shareholders". His implication 
(Letters, August 1) is thaf 
vaiuo to shareholders should 
be the prime objective far all 

W £?^p«w In busiMM fo 
create wealth for its sharehold- 
ers, to provide employment for 


its managers and staff, ot to 
produce outstanding products 
for its customers? Wealth cr^ 
attam as the prime objective » 


not the answer you would 
receive from any Japanese or 
- European company - nor from 
Sainsbury’s. nor Maries and 
Spencer, two of Britain's most 
: successful Companies. 

The reason Is that a com- 
pany has at least four stake- 
holder groups whose loyalty it 
amt retain ff It isto -prosper: 
shareholders, employees, cue- . 
tomers and suppliers. Each of 
these groups can help the com- 
pany succeed by commitment 
and support - or contribute to 
the company's failure by leth- 


argy and indifference. 

- For many managers this cre- 
ates a problem of priorities. 
When there in- a conflict 
between . employees and share- 
holders, for example, which 
-group should management 
favour? 

fit -seems possible to give pri- 
ority to any one of toe four 
stakeholder groups and still 
have, a- viable organisation. 
Hanson favours shareholders. 
Sainsbury’s, on the other hand, 
quite explicitly pianos share- 
holders last in the ranking of 


its stakeholders. (B« fifth and 
final objective is M to generate 
sufficient profit to finance con- 
tinual improvement and 
growth while providing our 
shareholders with an excellent 

return on their investment".) 

Success comes from adding 
value to - and therefore 
retaining — the loyalty of all 
the stakeholders. 


Andrew Campbell, 

Ashridge Strategic Management 
Centre, 

iKmgstoay WC2 


1 am optimistic that we will 
retain its character. But we 
have only been successful so 
far " 

Village over-development 
plac es great strains on infra- 
structure and social services. 
Many villages no longer have 
resident doctors and local hos- 
pitals have been dosed. Dwind- 
ling pupil numbers have 
caused the closure of many vil- 
lage schools. The reduction in 
rural bus services and an 
influx of people relying on cars 
means parked vehicles jam- 
ming narrow village streets. 
MOny village post offices have 
closed or are under th r^t and 
there are fears that the intro- 
duction of the uniform busi- 
ness rate could force even 
more of tha marginally profit- 
able village shops out of busi- 


Tt ft spoiling the village." 
she says. “I don't wish to be 
pessimistic but now the devel- 
opment has started I don't see 

US r wniaftring 

A public inquiry failed to 
halt it and an attempt to take 
the matter up with the 

Ombudsman was tffimrawuefTiI- 

in a letter to the then Con- 
servative MP for Taunton, Sir 
Edward du Cairn, Mr Ridley 
stated: "To defer action on 
such applications pending a 
public inquiry Into the local 
plan could be seen as an unrea- 
sonable imposition on develop- 
ers In that it might prohfoit or 
delay development which could 
reasonably have been permit- 
ted.” 

At Durweston, the parish 
council has worked closely 
with North Dorset District 
Couocfl. The draft local plan 
proposes that 45 new dwellings 
should be built in the village 
for the period 1990 to 1996. As 
some have already gone up 
during that period, the plan 
allows a further 28 up to 1996. 

Most of the land in and 
a round the village ft owned by 
foe Crown Estate Commission- 
ers and this ft probably why 
developers have found it diffi- 
cult to obtain building sites. 

Mr John Hosford,who has 
taken a leading role in preserv- 
ing the village, says cautiously: 


The natirc villagers feel they 
cannot win. More population 
would mean that some of these 
services could be saved; but 
the development that goes with 
more people ccmld rain a cher- 
ished way of life. Mrs Cather- 
ine Chafer, secretary of Rural 
Vodce,- a TMtimwai anftnee of 10 
voluntary organisations, says 
market forces will not solve 
rural housing problems. She 
b el i ev es the Government’s pro- 
posal for new villages ft com- 
pletely irrelevant. 

Action With Cnwnnnnffiag in 
Rural England (Acre), in a 
recentiypnblished report, Who 
Can Afford to Live in the 
Countryside? 9 proposed that a 
local needs category for social 
housing should be added to the 
planning system. Under this 
designation planning permis- 
sion would be given on the 
understanding that building 
would only be done by a hous- 
ing association. 

While the debate rages, pres- 
sure on village life rises. Gov- 
ernment figures show that 
over foe past 20 years the pop- 
ulation in many rural areas 
has increased by more than foe 
national average, while the 
population in the large towns 
and cities baa fallen. 

But village existence ft not 
always as unarming as tourists 
might suppose. In the Dnrwes- 
ton appraisal some local people 
described their life-style as 
“paradise" or “pure heaven" 
while others, pres uma bly the 
restless young, dismissed it as 
“extremely boring" or "stag- 
nant” 


*. Bousing in Rural Areas : 
Village Bousing and New VU - 
lages, a discussion paper, 
Dqiartment of the Environment, 
July 1988 

* The Future for Rural Com- 
munities, Association of District 
Councils, 9 Buckingham Gate, 
London SW1E 6LE, £5 


\ Who Can Afford to Lice in 
the Countryside? £3.50. ACRE. 
Stable Yard, Fauford Park, 
Fauford, GIos 


Third World Debt 


How to escape from 
the impasse 


By Gustav Ranis 


M anagement of the 
"debt crisis," which 
broke upon foe world 
in August 1982, has reached an 
impasse. The creditor devel- 
oped countries prefer to perse- 
vere with foe country-by-coun- 
try approach of structural 
adjustment packages orches- 
trated by the International 
Monetary Fund or World Bank. 
Meanwhile, the indebted devel- 
oping countries want global 
solutions, by which ft meant 
either general debt relief or a 
new international debt facility. 

Proponents of foe case-by- 
case approach take comfort 
from the recent performance of 
Mexico, which has swallowed a 
painfol dose of adjustment and 
seems to be turning the comer 
- as well as from the opposite 
experience of Brazil, which has 
pulled back from its exposed 
position as the first major 
debtor to refuse to make inter- 
est payments. 

Proponents of foe global 
approach emphasise that many 
debtor countries - including 
Peru, Bolivia, Ecuador, and 
Nicaragua - are already tech- 
nically in default. Further- 
more, private creditors are 
offering an expanding menu of 
debt relief options, including 
shaving margins over Libor, 
debt-for-equity swaps, 20-year 
zero-coupon bond purchases, 
and interest capitalisation, 
while official creditors are 
coming ever closer to forgiving 
Africa’s public sector debt alto- 
gether. 

It is little wonder that Con- 
gressman David Obey’s House 
Appropriations Subcommittee 
recently refused to include a 
mere $70m (£42m) US contribu- 
tion to a World Bank capital 
enlargement unless the Admin- 
istration comes forward with a 
more comprehensive plan to 
deal with the debt problem. 

It is not that nothing hew 
been accomplished since 1982. 
Surprising flexibility has been 
shown by all the relevant 
actors, both on the creditor 
and foe debtor side, including 
even the more vulnerable 
strata of the populations of the 
developing countries. None the 
less, all efforts to find addi- 
tional resources, both public 
and private, and to convince 
debtors that yet one more dose 
of austerity ft required, have 


merely bought time, without 
any clear notion about how 
that time should be nq«i 

The Baker Plan of 1985 ft a 
case in point. Beyond its 
emphasis on a continuation of 
the case-by-case approach and 
its (quite unrealistic) call for 
substantial arirtrtinnal lauding 
by the commercial banks, it 
proposed nothing new, except 
for vague references to a larger 
role for the World Bank rela- 
tive to the IMF. It gave no rec- 
ognition to the spread of 
"adjustment fatigue," and 
assumed implicitly that indus- 
trial country growth would 
refloat even the most battered 
developing country ships. 

More and more people won- 
der how much longer debtor 
governments can exact sacri- 
fices from their people for so 
uncertain a return. This very 
uncertainty is why commercial 
h anks are unwilling to make 
the additional loans that Mr 
Baker proposed and why foe 
people of the developing coun- 
tries have become increasingly 
restive. 

In seeking solutions, one 
must remember that most 
indebted countries had a devel- 
opment problem long before 
they had a debt problem. While 
details differ from country to 
country, resolution of these 
underlying development prob- 
lems usually require long-term 
organisational and institu- 
tional changes, quite apart 
from changes in economic pol- 
icy. The total' reaches far 
beyond the customary adjust- 
ment packages of foe case-by- 
case approach in both scope- 
and duration. 

Meanwhile, the sharp diver- 
gences in development perfor- 
mance since the 1950s bring 
home the danger of half-baked 
global solutions. 
Across-the-board debt relief 
may do no more than reward 
the profligate. The ready avail- 
ability of Opec surpluses in the 
1970s confirmed too many 
developing countries in the 
appropriateness at foe ineffi- 
cient growth paths they had 
chosen, so aborting many a 
movement towards reform. Ill- 
considered debt relief could 
bave much the same result 
today. 

Resolution of the develop- 
ment problem must be 


assessed country-by-country, 
as conventional wisdom 
assumes. But foe capacity to 
achieve something significant 
in each individual case 
requires a change in global 
arrangements as welL There 
must be more resources for a 
longer period as a carrot for far- 
more comprehensive reform 
than anything now contem- 
plated. 

Successful structural adjust- 
ment requires not a two-to- 
three year, but a 5-10 year per- 
spective. In addition, the provi- 
sion of additional resources 
without full understanding and 
political acceptance of what 
needs to be done ft likely to 
have the opposite effect to 
what ft intended: the pressure 
for reform may be reduced. 
When the chips are down, the 
creditors' need to lend usually 
turns out to be more powerful 
than the ppwj to ensure the 
quality of the process. 

In short, the best in the 
global and country-by-country 
approaches must be combined. 
What is needed ft a global 
capacity to support long term, 
ambitious structural adjust- 
ment programmes. In countries 
whose governments are willing 
to accept such an approach, 
teams would be established to 
develop medium term pro- 
grammes. These would focus 
on both the required policy 
changes and fow addit i onal for- 
eign exchange needs of the 
country, over not less than a 
5-10-year period. 

The process must be 
endorsed in advance by both 
the internati onal financial 
community and the govern- 
ments concerned. All must 
agree that the technical assess- 
ment is the point of departure. 
One or two real successes 
would demonstrate foe effec- 
tiveness of the new approach 
against that of current prac- 
tice. 

What ft needed now ft some- 
thing more ambitious, but not 1 
more permissive, than the 
present approach. Muddling 
through ft not a long term 
alternative, for its inevitable 
c ulminat ion will be large-scale 
friendly, or not so friendly, 
defaults. 

The author is the Frank 
Altschul Professor of Interna- 
tional Economics at Yale '. 


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FINANCIAL TIMES 

Wednesday August 24 1988 


■JUKI! 

The Master Printers 

jUBgU!Wa«)CMW! 

T«L 040)251 20 71-73- Few.; p4M2»ga»- 


City demand strips Treasury assets 

Ralph A tkins reports on the defection of British economists to the private sector 

H UMBLE British Trea- “ „ financial economist j 

sury economists, serv- 
ing Her Majesty Queen 


1 l \ ( O! I M \ 


H UMBLE British Trea- 
sury economists, serv- 
ing Her Majesty Queen 
Elisabeth in once-grand offices 
overlooking Whitehall, Lon- 
don, might be forgiven for 
thinking the grass is greener 
on the other side. 

Across town, in City of Lon- 
don dealing rooms, the econo- 
mist lives in a world of high- 

tech and high cheques. There 
are perks galore: bonuses, 
expense accounts, cheap mort- 
gages and the chance of glory 
on television news. 

■ If there is a simple explana- 
tion for this wide City /Trea- 
sury divide it can be set out; 
ironically, in terms of demand 
and supply curves - the basic 
tools of the professional econo- 
mist 

On the wrong side is the 
Government Economic Service 
(GES). Competition for a lim- 
ited supply of good economists 
led to a doubling in the resig- 
nation rate among Treasury 
economic advisers last year 
- to nearly 30 per cent 
For the whole GES - which 
boasts almost 400 staff includ- 
ing TO in the Treasury - the 
resignation rate in 1987 was 
about 10 per cent Among grad- 
uate entrants to the GES there 
were fewer applications to be 
economic assistan ts in 1987 
than in any other year thin 

decade. 

The divide was highlighted 
in June. An article in FDA 
News, the journal of the First 
Division Association of top 
civil servants, complained of 
low morale arid high wastage 
rates. 

“Economists feel that their 
position is being undermined, 
but are unclear whether it is 
due to incompetence, poor 
management or deliberate pot 
icy. In such a setting, even con- 
spiracy theorists receive a 
hearing,” wrote Mr Dan Cony, 
the aggrieved Treasury econo- 
mist 

The depressing picture begs 
the question of the quality of 
economic advice the Govern- 
ment is now receiving. Work is 



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tutions. Salaries at the top are 
rumoured to approach £250,000 
($417,500) even before perks, A 
competent ex-Treasnry 24- 
year-old could expect to start 
on £20,000 a year with bonuses 
and mortgage subsidy. 

In contrast the starting sal- 
ary for a graduate nnHw 26 
years old in the GES based in 
London will be £10,150 from 
October. 

Economic Advisers, who 
must have at least five years 
experience, will have salaries 
ranging between about £L8£00 
and £23£00. Additional perfor- 
mance points introduced from 
October could take the most 
able, after a period of years, to 
a maximum of a little above 
£27,500. 

Top City economists are 
becoming harder to fmri - and 


being delayed while the reli- 
ability of Treasury economic 
forecasts is being challenged 
by City analysts. 

The Treasury says falling 
graduate a ppikjjtlnnB have not 
hindered recruitment at this 
level The problem seems to be 
more in retaining the older, 
more experienced, economic 
advisers. “If your colleagues 
are moving off quite often, 
then yon wonder why yon are 
hanging about,” said one 
insider. 

Mr Nigel Lawson, Chancellor 
of the Exchequer, has derided 
City economists as “teenage 
scribblers”. It would be embar- 
rassing if the age profile of his 
own team tumbled too far. 

On the other side of the 
deman d curve are economists 
wmking for big financial ins#. 


Upbeat A$5.5bn budget 


By Chris SherweH in Sydney 

MR" PAUL KEATING, 
Australia's federal Treasurer, 
yesterday announced an 
upbeat budget promising con- 
tinued strong economic 
growth, increased investment, 
lower unemployment and 
reduced inflation. 

The package included a 
record budget surplus of 
A$5A7bn ($4.44bn) for the year 
to June 1989, a further reduc- 
tion in the current account def- 
icit to A$9.5bn and evidence 
that the country's external 
debt was stabilising as a per- 
centage erf gross domestic prod- 
uct 

As such, it appeared to con- 
firm Australia’s transition 
from the gloom of 1986, when 
Mr Keating said it was in dan- 
ger of becoming a “banana 
republic”, to a boom which 
leaves the Labor Government 


well positioned to fight the 
next election, due in 1990. 

In line with this, he prom- 
ised income tax cuts to take 
effect from next July provided 
a wage-tax tradeoff could be 
negotiated with the union 
movement The size of the cuts 
would depend on what hap- 
pened to wages in the interim. 

The projected budget surplus 
is equivalent to 1.7 per cent of 
gross domestic product and 
means that some A$6bn of 
domestic and foreign debt will 
be retired and the net public 
sector borrowing requirement 
will come down to zero. 

GDP growth in real terms is 
forecast at &5 per cent all of it 
coming from domestic demand. 
A surge in business investment 
is foreshadowed, and unem- 
ployment is expected to fell to 
7.25 per cent 


Continued from Page l 
Antwerp assembly works into 
one plant capable of producing 
392,000 cars a year. This week 
it is introducing a new man- 
ning system with three crews 
working a pattern of two 10- 
hour shifts a day, six days a 
week (with a single shift on 
Saturdays), giving a plant util- 
isation of 110 hours a week 
compared with 75-78 hours 
under conventional labour 
agreements. 

GM claims the Antwerp 
plant will be the most produc- 
tive in the European motor 
industry. “This is the non plus 
ultra," said Mr Hans Gensert. 
GM Europe’s executive director 
for manufacturing, “there is no 
one (in Europe) that can beat 
Antwerp with this kind of 
agreement." 

Production erf the new Vec- 
tra/Cavalier begins this week. 
It will be introduced at the 
Paris motor show next month, 
and will be launched in all 
European markets during the 
autumn, starting in West Ger» 
many and the UK in mid-Octo- 


ber. 

GM Europe is planning to 
produce about 350,000 units in 
1989, the first full year of pro- 
duction, compared with an out- 
put of 235,600 units of the exist- 
ing Ascona/Cavalier last year. 

“With this new model we 
will make a strong drive for 
market (segment) leadership,” 
said Mr Thomas Mason, GM 
Europe’s vice-president for 
sales. 

The increasingly competitive 
mid-range segment accounted 
for 2.7m cars or 22 per cent of 
the total West European car 
market last year. GM is aiming 
to restore its share of the seg- 
ment to more than 13 per cent 
from the 9.2 per cent held last 
year by the ageing Ascon- 
a/Cavalier. 

“It is a profitable market 
where all manufacturers are 
concerned about doing well,” 
said Mr Mason. 

GM’s existing so-called J-car, 
badged as the Opel Ascona in 
continental Europe and the 
Vauxhafl Cavalier In the UK, 




Left, the British Treasury: 
losing its economists to City 
of London institutions, and 
above, Mr Nigel Lawson, 
Chancellor of the Exchequer, 
who has derided City econo- 
mists as “teenage scrib- 
blers”. 

can almost afford to dictate' 
their own terms and condi- 
tions. “If som eone is lo oking 
for an economist and they need 
a good one, then they wQl out- 
bid the market to get him,” 
says Mr Andrew Stewart, 
.senior consultant at BBM Asso- 
ciates, the head-hunting con- 
sultancy. 

Among the cast-list of lead- 
ing players at well-known secu- 
rities houses, there are enough 
former Treasury economists to 
form a decent-size dining dub. 

The membership list would 
include Mr Steven Bell, 35, and 
Ms Evelyn Brodie, 30, chief 
economist and senior UK econ- 
omist r espect i vely, at Morgan 
GrenfeEL Mr Stephen Hannah, 
35, UK economist at County 
NaiWest is ex-Treasnry. So too 
is Mr Simon Briscoe, 29, senior 


financial economist at Gtoeen- 
weft Montagu. 

At Phillips A Drew, Mr Mark 
Brown, senior US economist 
and M r Chris Johns, senior 
currency economist, would be 
djgibte for membership. And 
at Chase Manhattan Securities, 
Mr Nett MacKinnon, 33. senior 
economist, gleefully describes 
himself as a “former teenage 
arribbipr to the Chancellor”. 

Although the private sector 
economists appear to be the 
clear winners, there is a twist 
to the demand and supply 
curves. 

High salaries among City 
economists reflect fierce com- 
petition a awn band of 
perhaps no more than 200. And 
there are fears of a possible 
shake-out in the face of thin 
turnover in equities and. 
gut-edged securities compared 
with the halcyon days before 
the October stock market 
‘crash. 

Pressure is intense. Dealers 
and traders aim to be one step 
ahead erf the market but the 
economist has to be at least 
three. Dealers meed to know 
what tomorrow’s economic fig- 
ures will mean for markets; 
economists have to forecast 
what next month’s statistics 
will be. 

A high profile is esse nti a l . 
Business depends on the qual- 
ity of frifnrmarin n and tile cli- 
ent list wQl be longer if a secu- 
rities house can boast an 
economist with “gum” status. 

Economists' role in promo- 
ting the firm provides some 
protection. They are regarded 
almost as a a™* overhead for 
a market-making operation. 

Market forces, however, may 
find their own solution to the 
Treasury’s problem. It is 
harder weak making a living 
when the FT-SE 100 share 
Index is no longer climbing 
■ever upwards. Salaries may be 
trimmed, staff levels cut back 
and the pressure intensified 
still further. 

Then the path from the Trea- 
sury may not seem so attrac- 
tive. 


Moscow’s neighbours 
grow restless for change 


The cur r ent account deficit 
is forecast to foil to 3 per cent 
of GDP from 6 per cent three 
years ago. But Mr Keating said 
that, “while the balance of pay- 
ments deficit is Australia’s 
number one economic problem. 
Infla tion remains Australia's 
number one economic disease.” 

He predicted that the infla- 
tion rate would foil to per 
cent by next June, helped by 
indirect tax changes, and said 
that this could fall further 
under the scheme linking wage 
increases and tax cuts. 

In his speech to parliament, 
Mr Keating said the nation was 
emerging from its most severe 
economic crisis in a genera- 
tion, and that the economy was 
being systematically restruc- 
tured to make it better able to 
compete internationally. 
Details, Page 8 


GM seeks European leadership 


was Europe’s best-selling car 
in the intermediate segment 
for three years in the mid-1980s 
and was the major factor 
behind the transformation of 
the fortunes of Vauxhall, GM’s 
UK subsidiary, which almost 
doubled its share of the British 
car market from just over 8 per 
cent at the beginning of the 
1980s to a peak of 1G.6 per cent 
in 1985. 

• The .sector is currently domi- 
nated in Wbst Europe by the 
Ford Sierra, which captured a 
13^ -per cent share last year, 
followed by, the Renault 21 
with 12 per cent and' the 
Citroen BX with 101 per cent 
The launch of the new Veo 
tra/Cavalier will further Inten- 
sify the pressure on Ford, the 
market segment leader, whose 
Sierra replacement is thought 
to be at least two years away 
and which is already facing 
added competition this year in 
the shape of the Peugeot 405, 
launched in the UK in Janu- 
ary, and the new Volkswagen 
Passat, launched In the spring. 


Poland rejects 
Walesa talks 


Continued from Page 1 

/■ 

friends outside the yard tried 
to get as close as possible. The 
' three crosses monument and 
the nearby main gate erf the 
shipyard, which was festooned 
with Solidarity banners and 
religious symbols, .were cor- 
doned off by the police. 

Most inhabitants of Gdansk 
went about their daily affairs 
calmly but the main topic of 
conversation was the strike. 
There was no evidence of panic 
buying or hoarding in G dansk 
as had been reported from, 
other parts of Poland 


C o nti nue d from Page 1 

adopt, such reforms as Mr Gor- 
bachev is implementing in the 
Soviet Union, the pressure for 
change is coming from outside 
the ruling Communist parties, 
with the sole exception of Hun- 
gary. 

But what must concern the 
leaderships most of all is that 
this pressure is taking the 
form of specific national inter- 
ests. 

Such national interests were 
never articulated in the past 
Differences within and among 
the allies of the Communist 
camp were discouraged. Dis- 
putes between neighbours 
were simply not allowed. But 
. this is c ha ngin g - The advent erf 
Mr Gorbachev has meant that 
the allies can criticise each 
other more openly. The prob- 
lem for Mr Gorbachev and 
Eastern Europe's leaders, how- 
ever, is that the criticism is 
taking an a specific form of 
political nationalism which 
moves outside the Communist 
parties. Poland and Hungary 
are striking examples of thin 
trend. 

While some Solidarity activ- 
ists believe that Mr Gorbachev 
promises a degree of hope, the 
bulk of Polish society sees the 
world largely through anti- 
Communist eyes. 

During the 1970s, Poland 
could boast one of the most 
liberal systems in the bloc 
while, at the same time, the 
regime of Mr Edward Gierek 
engendered outward national 
feelings to bolster the popular- 
ity of the Polish Communist 
party. For example, the his- 
toric Royal Palace in Warsaw, 
one of the seats of the Polish 
kings, was rebuilt as an expres- 
sion of national identity, and 
the Polish eagle was once 
again hung in offices. 

Yet such nationalist expres- 
sions and rituals remained 
devoid of political content and 
could provide no lasting substi- 
tute for independent political 
participation by ordinary 
Poles. The upshot is that today 
most people continue to refuse 
to support a regime which is 
not of their choice. 

However sincere Gen Jaruz- 
e Jff ki is about pushing through, 
economic reforms, workers 
reckon that they, and not the 
party, win have to pay the cost 
of such reforms in terms of 
higher prices, an appalling 
infrastructure, a deteriorating 
environment and little chance 
of owning a car or a flat for at 
least 15 years. 

Indeed, the growing feeling 
- if it is not already too late to 
begin overhauling the wwnnrny 
radically and rebuilding the 
infrastructure - is that only 
by allowing genuine indepen- 
dent political institutions can 
the country's leaders gain 
some support for their reforms. 

The situati on in Hungary is 


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just as complex. The Govern- 
ment there has gone furthest 
with a form of “socialist plural- 
ism," but at the same time it is 
allowing "national interests” 
to gain greater ground. One 
reason Is that the economy is 
so bad that nationalism serves 
as a useful but potentially dan- 
gerous way <rf deflecting dis- 
content from economic Ws. 

Last weekend clearly demon- 
strated these se n ti me n ts. The 
Government for the first time 
commemorated the 950th anni- 
versary of the death of Hun- 
gary’s first King, St Stephen. 
He, and particularly the Crown 
of St Stephen which was 
finally returned to Hungary in 
1978, is hugely symbolic for the 
present leadership since pos- 
session of the Crown confers 
legitimacy. 

The anniversary thus 
stressed the continuity and 
legitimacy of the Hungarian 
state and implicitly of the pres- 
ent Communist leadership. 

But it is not only history 
which the authorities regard as 
an increasingly important tool 
for establishing a sense of 
Tiptiorini identity gnfl diverting 
attention away from economic 
hardship. In recent months, 
growing numbers of Hungari- 
ans have protested openly 
against the planned destruc- 
tion of ethnic Hungarian vil- 
lages in Romania. 

According to Hungarian 
experts, the dam will do irrepa- 
rable damage, not only to the 
environment but to the natural 
underground water filtering 
system. For the moment, the 
Czechoslovak authorities back 
the project fully. But the Gov- 
ernment, aware of the opposi- . 
tion and the mounting criti- 
cism, could well be forced to 
pull out of the scheme. 

If it did, Mr Kandy Grosz, 
the party leader, would become 
enormously popular. However, 
that decision would inevitably 
mean a victory for national 
interests. 

Such interests have taken a 
different form in Czechoslo- 
vakia. The young people, many 
of them babies m 1968, who 
marched last Sunday night on 

the 20th anniversary of the 

Prague Sirring, used history to 
stress their own sense of iden- 
tity and political conscious- 
ness. Instead of calls for Mr 
Gorbachev, they chanted the 
name of Masaryk, the first 
President of an independent 
Czechoslovakia. 

Since the Communist take- 
ova* of the country in 1948, his- 
tory has been rewritten and 
distorted many times by suc- 
cessive leaderships. But it is 
history which is providing the 
link between the present, 
younger generation and the 
democratic traditions of a pre- 
war independent Czechoslo- 


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oagemenfs eagerness to 
reduce the dependence on 
Hong Kong. 

Taylor Woodrow 

It cannot be pure coinci- 
dence that Taylor Woodrow 
shnnlrt unveil a liiflgnlflwgit set 
cf interim figures, a top man- 
agement reshuffle and an 
increase in the share stake cf 
the founder and his wife, only 
a mont^i after P&O bought a 
stake in the company. While it 
would be unfair to suggest that 
Taylor Woodrow is sacrificing 
its traditional conservative 
stance to bolster its short-term 
performance, FAQ’s arrival on 





The reason for Shell's nota- 
ble absence an the Hat of big 
oil companies buying up the 
UK oil independents is now 
dear. It is not that such take- 
overs would clash with its cor- 
porate style, but simply that on 
the -view of - oil prices 
expounded yesterday the bid 
«niwa do not begin to add up. 
Shaft's dismal picture of 510 to 
$20 nominal oft prices for years 
ahead makes a disturbing con- 
trast both with the bullish 
views of the US oil majors, and 
also with the market’s tacit 
belief that prices will rise in 
tire medium term, albeit gradu- 
ally. 

Even if everybody has once 




casinos were in unusually bad 
shape in first half 1987, but 
they were in no less unusually 
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And in any case, Pleasurama is 
a substantially different com- 
pany now than two years ago, 
when its dependence on the 
volatile casinos was far 
greater. 

The Pleasurama share price 
comfortably ignored yester- 
day’s badinage between the 
two interested parties, in the 
confident expectation that the 
real news will come today with 
' the Mecca offer document. 
Chances are it will not be the 
last such document from 
Mecca. 


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A test for Brazil’s 
privatisation plains 


The Brazilian Government has sow seven 
«at»*owned companies since June 1887 and ' 
naa plans to sen a further 18 next year. But Ks 
energetic privatisation policy win -be put fully to 
the test today when Caraiba Metals, the copper 
smelter with borrowings of about $2S0m, is put 
up for sale by auction. “If we can privatise Car- 
“!£*? we oan Private® aimost anything," one 
official sard. Page 18 


PollshMiipJtsmatqiNi 




General Motors of the US has powered its way 
to a dramatic financial recovery in Western 
Europe in the last two years, -although losing 
some market share. It is looking to the launch 
today of the Opel Vectra/Vauxhall Cavalier, its ~ 
new mid-range model, to stop that decline and 
seal Its position alongside Europe's big six vol- 
ume car makers. Page 16 


Statoi), Norway’s state oil company, has called 
for a cash Injection of NfCrSbn ($429m) to allow 
ft to sustain current operations and to raise Its 
capital ratio, which has plunged to 10 per cent 
due to lower on prices and budget problems 
with the Mongstad refinery project Page 17 


The beleaguered Austra- 
lian coal industry is 
waiting anxiously for two 
key decisions in the next 
few weeks which, it 
hopes, will bring some 
sorely heeded good 
news. The outcome of 
protracted negotiations 
on steaming-coal con- 
tracts with Japanese 
utilities could lead to a 
jump in prices after a 
long period of weak- 
ness, and a ruling Is to be given on a difficult 
and costly labour dispute concerning more 
flexible working practices. Page 82 


SMm 

in 

hi 


■ 

i 


Northern Engineering Industries of the UK Is to 
Ipcreas* Its dividend for the first time Jn fly® 
years after announcing » 90 per cent advance 
in firat-half pre-tax profits to £l&fin|.($9lm). 
The powerrt|BtoQS~and ^nster^ft ^dllng , 
supplier saw its order-intake lnereaae 19 per 
cent to £420m but lower turnover, laUing to 
£32S.4m from reflected lower comple- 

tions of major contracts. Pago 22 




IM—d p r of H fr for JUMP 

Despite betng West Ger- 
many’s fifth biggeat 
. chemicals company, 
with sales this year likely to be between 
0M8bn and DM9bn ($4.7bn). HOte is relatively 
anonymous both at home arid abroad. To raise 
its profile, the company has bought the chemi- 
cals and plastics operations of Dynamit Nobel 
of West Germany, has entered* Joint venture . 
with Daleeti of Japan and plans various acqui- 
sitions in North America. Page 17 




8iw twSv nrin 
Biropen axtatfadi 
Ft-AMW 
ft'Awodtftattn 
FT tat bond BMvke 


RnooW Mam 


B Loodoa atom sarvici 2 MI 
a London Bated options ' a 
a London tncSt optima H 
M Money mate* a 

IS World canmodKy prices XZ 
WtKU stock ndct Endkm a 
a ttCdMdsndsew»noxl » 
a Use busts *M7 


Apple Computer 
Aehton M tnmg ... 


Ashton M tntrip ... 
Beatrice . 
BJUfnpspaie Cfty 
aromeorove bide 


Cambridge Bactranki 
Catalyst Comma - 


Catalyst Comma 

Charms 

Deere 

DeC 

eec Group 
Evan* Hatohaw 
Ex-Land* '.' 

FsnwA eMPtionkai 
Federated Housing 
FtnaWer 
GT Sutton 
General Motors 
HflGM 

Henry Anabacher 


18 Holmes* Merchant 
18 Irish Distillers 
« Johnnies 

90 KLP .. . ’ ■ 

SI Lear Stagier . 
tt LHe Sdencee InL 
» Mecca Leisure - 
18 NZ Electricity . 

18 Next 

17 Northern Engtneerihg 
92 018 

18 CHivea Paper MH1 
99 PM> 

18 Pleasurame 
22 RatcUfl* (GB) 

17 S&WBenstord - 
20 Sampo 

10 Scandinavian Bank 
at statoii 

at TempWKm. Galbraith 
Tootsie Roll 
Untied Scientific 
Wayne Kerr 


Chief price changes yesterday 




FINANCIAL TIMES 


COMB\NIES & MARKETS 



Wednesday August 24 1988 


Collapse of the Hunt empire 

Janet Bush on the legal battles which face the prominent Texan family 


T he Hunt family of Dallas, 
Texas, once among the 
richest and most powerful 
dynasties in America, has long 
possessed all the hallmarks of 
soap opera, yet its story outstrips 
even the most extravagant of the 
genre. 

There was bigamy, interokdne ' 
rivalries ami wealth beyond the 
wildest dreams. There was also a 
potent mix of right-wing politics 
and more than a touch of reft- 
gams eccentricity. Finally, above 
all. there was the fell fbom grace. 

A Federal jury ruling in Man- 
hattan last Saturday was the latr 
eat, and possibly most deadly, 
stage in the erosion of an em p ir e. 

Based on evidence collected in 
fly US and in' European 

cities, the jury found three of the 
most prominent Hunt brothers - 
sons from the first marriage of 
the legendary Texas all man; Mr 
HX. Hunt - had co mmitte d 
fraud wnd 'violated. 
and anti-frost laws. 

The jury concluded that the 
brothers had conspired to comer 
the world silver market between 
late 1979 and early i960 with the 
help of ptY imlTWlt. I n thItiwmiiiw i 
dose to the Saudi Arabian royal 
family. Also found liable oh Sat- 
urday were Mr Mahmoud Fus- 
tock, brother-in-law of Saadi 
Aranda’s crown prince; and Inter- 
national Metals Investment Co, a 
Bermuda-based company trading 
in silver futures, owned by Bun- 
ker and Herbert Hunt and tiro 
Arab *b«nrh« 1 

Mr Nelson Banker' Hunt, con- 
sidered the richest man in the 
world in the 1860s with a fortune 
estimated at ftfbn, and Mr Wil- 
liam. Herbert Hunt, his more 
down-home younger brother who 
insists on. mowing his own lawn, 
were also found guilty of violat- 
ing dvil sections of the racketeer- 
ing law. Mr Lamar Hunt, who 
was always more interested in 
professional sport and is the 
owner of the Kansas City Chiefs 
football team, was not c ha rged 
with racketeering. 

Saturday's judgment was the 
fiat time the Bunts' liability has 
been established for the extraor- 
dinary p w n in in the silver mar- 
ket when the price of the metal 
rose from 99 to 960 an ounce and 
then leQ all the way back down 
again in a few months. 

: The ruling is only the first of 
several major court cases which 
wfiJt attempt to win damages for 
investors who claim losses' as" a 
result of the Hunt brothers’ 
manipulation of the market 
The award of hefty damages of 
more than 9130m to Minpeco, a 

mptnin marketing arm of the 

Peruvian Government, seta a 
dear precedent for payouts to 
other investors. 

Mr Herbert Deutsch of Deutsch 
& Frey, the New York law firm, 
will prosecute two major class 
action suits against the Hants 
and their co-defendants on behalf 
of about 27,000 in v estors identi- 
fied aa. befog active in the silver . 





The Hunt brothers: (from left) William Herbert, T*winr 
and Nelson Banker leaving a Manhattan coart last week 


8Hver 

$ per Thy ounce (London) 


: 


a ,V' 

: .. - • • 

. - 


~ ~ ■ "• I 


Jan 1 S 79 


Jan fSBO 


market during that period: 

Mr Deutsch hopes the cases, 
which will be base! on the same 
evidence used in the Minpeco 
case, will be heard in the late 
autumn. These suits rfaim 9500m 
in damages and widen the net 
Mr Deutsch has named various 
brokers which, he believes, evi- 
dence will show financed the sa- 
ver market conspiracy and took 
an active part in -it They are 
Morin Lynch & Co, Prudential 
Bacbe Securities Inc, ACLI Inter- 
national Commodity Services Inc, 
Contlcammodity Services Inc and 
Continental Grain Co. 


A fter Saturday's ruling, Mr 
Deutsch believes he has a 
very strong case. “The 
HmrtK nan no longer chant their 
little mantra about not influenc- 
ing the silver market They now 
have to stand naked before the 
world as having conspired 
together," he said. 

He charges that the brothers 
.had endangered the financial fib- 
ric of the US as well as markets 
in London and Switzerland. 

The sharp movements in the 
silver price in late 1979 and early 
1960 was not just a simple ques- 
tion of volatility. It was of grave 
concern to the US authorities, 
not least Mr Paul Volcker, then' 
chairman of the Federal Reserve 
Board. He was concerned that so 
modi of the world’s silver bullion 
had falle n tutr> the hands of a 
single group of people, rumoured 
to be acting togriher. 

Harry Hurt IQ, author of Texas 
Rich, the defin itive biography of 
the Hunt fondly, believes the rul- 


ing in Manhattan has opened the 
door to other law suits which wQl 
cost the Hunts, who were esti- 
mated to have lost more than 
92bn from their silver play, a 
great deal of money and lead to a 
haemorrhaging of the empire, 
already in considerable finanriai 
disarray. 

Placid OH and the brothers* 
three trust estates, which own 
Penrod Drilling, the. family’s 
other big energy asset, are all in 
bankruptcy under Chapter 11, 
which allows a business to 
restructure while protected from 
its creditors. These troubled com- 
panies are thought to tie up more 
than half of the brothers’ wealth 
and their reorganisation involves 
substantial settlements. 

- Mr Henry Simon, the lawyer 
who is acting for Placid Ofl and 
the three fruits, said they should 
come out of bankruptcy in Sep- 
tember as Chapter 11 proceedings 
are wound up- He said the Man- 
hattan court ruling related to the 
brothers personally and should 
not disrupt this process. 

Court filings suggest the 
brothers are now worth a net 
911m, including trust real estate 
investments, which may be diffi- 
cult to divest, and personal assets 
disclosed in judicial documents. 
In 1980, their net worth was 
about fSbn, excluding those real 
estate holding s and ana of their 
principal energy wimpanlas- 

Mr Hurt said: "Daddy gave the 
first family (ELL. Hunt’s children 
by the first of three wives - the 
first two at the same time) the 
bulk of his fortune and the 
brothers were always determined 


Cambridge Electronic in US deal 


By Andrew HtU in London 


CAMBRIDGE' Electronic 
Industries, which was floated off 
by Philips, the Dutch electricals 
arid electronics group. In 1981, 
has returned to its parent to buy 
two . US electronic component 
businesses for a total of about 
■954m in cash and shares. 

The manufactur er of e lectronic 
components and printed circuit 
boards is also negotiating the 
£9m (915.1m) cash purchase of 
two European component compa- 
nies from an unnamed seller, 
thought to be Philips. 

Mr JOhn J teka o n, cha irman of 
the UK group and a ncm-execu- 
tive d ir ec to r of Philips, said CEI 
no longer wished to be dependent 
on the UK market. 

CEI is acquiring the Dialight 
division and the switch and panel 
operations of Philips’ Mepco/Cen- 


tralab division for a premium of 
about 94m over net asset value. 
The move ahmild tnaw B M * CETs 
annual sales tn the US from 
about 925m to 9100m - just 
under 30 per cent of the enlarged 
group’s annual turnover — and 
give CEI a sales base in the 
Pacific basin, where it plans to 
expand farther. 

TO fund the latest acquisitions, 
C3SI is placing 3-87m new ordi- 
naiy share s, rep resenting about 9 
per cent of CBTs enlarged capital, 
with Philos’ US arm. The bat 
anceof someSSS m wil l be paid in 
cash, pushing up CETs negligible 
gearing to about 50 per cent 

CEI plans to offeet this by relo- 
cating some of the US companies* 
plant from gg p»ig it np sites, reduc- 
ing costs and instituting other 
measures to recover more than 


915m. 

The companies, which manu- 
facture electronic switches, key- 
boards and display panels, made 
53.69m before .tax on sales of 
979.5m in the year to December 
31. but profit margins have been 
declining for the last five years. 
CEI said existing management 
was unlikely to be replaced. 

Earlier this month, CEI 
announced a £4.7m agreed bid for 
InfraRed Associates, a US-based 
maker of infra-red detectors 
which is quoted on the Unlisted 
Securities Market in fli* UK. 

- Yesterday, the group also 
reported a 19 per cent increase in 
interim pre-tax profits to £6.0lm 
in the six months to June 30. 

Shares in CEI fell 14p to 246p, 
having risen in advance of the 
interim results ann o imrarm^t 


Kelly to resign as Beatrice chairman 


By Deborah Hargrram In Chicago 


tint Donald kelly, the 

flamboyant chairman nf ftwt riw,, 

.Jhe diversified food concern, is to 
resign from the company he took 
private in one of the largest 
leveraged buyouts in US corpo- 
rate history two years ago. 

Mr Kelly, aged 65, wu remain 
a "substantial' investor in the 
company «»a wfll whiHiwm to sit 
ouTthe Beatrice board after Us 
resignation on October 1. He- will 
harm over the reins to Mr Fred 
Bentschler, jnesident and chief 
executive officer. ... 

Mr KeBy’fe decfstain ' ra nw ay — 
Beatrice shifts its focus from 
befog a hnMiny concern to a con- 
sumer foods operating ww ip imy 
Xh aTffing made to the Securities 
end Fwbeng e - W 

month. Beatrice said It had term!- 
nated discussions on the sale of 
its Trading nperatteg . compyiifl^ 
and on finding a buyer for the 
wtede finur • 

A com pan y. official said: "Now 
tiwt we've tddfiedto being primdr 
paUy an operating pompa-- 
nyi . . . that is not aa area: of 
particular inteest to Don he feels 


his role is not as crocEl as it was 

before.’’ 

Store .Mr Kelly took Beatrice 
private in a 96.2bn buyout - 
with help from Kohlberg Kravis 
Roberts, the New York invest- 
ment firm - in 1966, be has bro- 
ken .up tie company's food dM- 
sfons and sold off more than. 97bn 
in assets. 

The company’s most recent 
sales toclnde its Tropjcana Prod- . 
nets division of fruit juices for 
$U2bn and E-H Bbldtags, a mix of 
nonfood and food specialty com- 
panies, tor 9800m. 

Known to rettah his rep u t ati on, 
for dealntaking in the food indus- 
try, Mr KeUy is unlikely to be 
considering a quiet retirement. 
He is rumoured to be onthft look- 
out for another smaller acqnist 
tion. but tire company says it 
knows of- no farther plans of b!s_ 

Mr Kelly been indi- 
rectly with Beatrice and its pre- 
decessors store the 2950s. He was 
Bsm ark, a company 
which made Swift meats, peanut 
butter and Playtex underwear, 
when Beatrice took it over in 


3981 He resigned to form his own 
company. 

A year later, he teamed up 
with former Esmark executives, 
j n^indmg Mr Bentschler, to nut 
together a hid for Beatrice, which 
Had been crippled by the depar- 
ture of many of its top managers. 

Mr Bentschler will use. his 
strong operating experience to 
nm the rump of Beatrice food 
concerns, which include tomato 
sauce products, popcorn, turkeys 
and County- Line, one. of the 
country ’ s largest cheese produc- 
ers. The company says it plans 
no significant changes as a result 
of Mr Kelly’s departure. 

Beatrices SEC filing said ' the 
company planned to explore and 
pursue various restructuring 
alternatives, which might call for 
the divestment of various other 
assets from time to time. 

Beatrice’s smaller divisions - 
Southern Bakeries. International 
Jensen, an audio equipment firm, 
and Rusty Jones, an auto rust- 
proofing and soundproofing divi- 
sion - are likely candidates for 
disposal in any restructuring. 


KEY DATES 


November 1974: HJ_ Hunt, 
founder of the Hunt business 
empire, dies, aged 85. 


December 1979: Hunt family 
and Arab partners amass dose 
to 200m ounces of silver, worth 
an estimated $&Bbn. 


January 1980: silver prices hit 
a peak d Just over 950loz. 


March 1980: prices plummet 


April 1980: Hunts say they lost 
op to 91 tei on silver speculation. 


March 1985: Hunt International 
Resources flies for bankruptcy. 


August 1986: Placid Off files 
far b a nk ru p t cy. 


1988-1987: various family trusts 
file for bankruptcy. 


July 1988: Hunts agree to give 
creditor banks 50 par cent stake 
In Penrod Drilling. 


August 1988s Hunts ordered to 
pay 9130m damages to 
Minpeco. 


Parts for vour car 


Rhone-Poulenc 


pays £30m for 
ICI subsidiary 


By Peter Marsh in London and George Graham in Paris 


to prove that they were not just 
inheritors of wealth bat business- 
men in their awn right 

"The cosmic historical irony is 
that they have not only lost what 
they made themselves but also 
most of what they were given.” 

Mr Hurt does not much Uke 
the Hants, hat he still thinks, 
they are being prosecuted for the 
wrong crime. He believes their 
vast accumulation of silver bul- 
lion was not an attempt to comer 
the market fin: profit 


IMPERIAL Chemical Industries, 
Britain's biggest chemicals com- 
pany, is to sell its European sili- 
cones business to Rhone-Poulenc, 
the state-owned French group. 

The acquisition by Rbone-Pou- 
lenc, which is thought to have 
cost it less than £30m (950.4m), 
will strengthen the French com- 
pany’s already strong position in 
the £500m-a-year West European 
market for silicones, which are 
used in products such as emul- 
sions, greases and sealants. 

ICI said it had sold the busi- 
ness as part of its policy of leav- 
ing commercial areas where it 
does not have a leading market 
share. ICI’s sales of silicones 
accounts for less than 5 per cent 
of the European market. 

Other European leaders in sili- 
cones include Dow Chemical of 
the US and a joint venture 
between General Electric and 
Union Carbide, also of the US. 

The deal between Id and 
Rhdne-Poolenc will mainly 
involve an Id silicone plant at 
Ardeer, Scotland, output from 
which will be transferred to the 
French company. The 90 ICI 
employees concerned with sili- 
cone production at this site will 
remain on the company’s payroll 
and in their present jobs for up to 


two years, while Rhone-Poulenc 
assumes responsibility for 

Rh 6 ne -Poulenc will also take 
over ICTs current sales support 
operations for silicones. These 
activities, based in Leatherhead, 
Surrey, and Everberg, Belgium, 
employ about 25 people. 

The future for the Id employ- 
ees concerned with silicone man- 
ufacture at Ardeer - a large Id 
site which employs a total of 
about 2,000 people in various, 
areas of industrial chemicals - 
will be reviewed at a later stage. 
At this point Shdne-Poulenc 
could decide to integrate the 
manufacturing of silicone at 
Ardeer with other silicone pro- 
duction operations in the rest of 
the French group. 

Rhdne-Poolenc has expanded 
rapidly in recent years in sili- 
cones, doubling output of certain 
product Kn«>« at its Saint Rons 
plant in France and bringing on 
stream its first North American 
sealants plant at Lakewood, New 
Jersey, last year. 

Rh6ne-Poulenc said yesterday 
that the Id division would rein- 
force its 1,500-strong silicone 
product list with specialties such 
as anti-foam and paper treatment 
silicones, besides adding to its 
geographic range. 


Hongkong Bank lifts 
payout after 19% rise 


By Michael Marray in Hong Kong 


T heir aim was much 
broader and much more 
arrogant. After extensive 
interviews with the Hunt family, 
Mr Hurt believes their silver play 
was a hedge against the apoca- 
lypse which they felt was immi- 
nent The Shah of Iran had just 
been deposed, the Soviet Union 
bad invaded Af ghanistan, there 
was hyper inflation and Jimmy 
Carter was perceived as a danger- 
ously weak President of the US. 

Mr Bunker Hunt, a member «L 
the richest family in Texas If not 
America, along with representa^ 
lives of the richest family in the 
world - the rulers of Saudi 
Arabia - aimed at no less than a 
return to a hard metal standard 
to maintain the stability of the 
western financial system. 

’Their sin was erf arrogance, 
beyond arrogance, for what they 
were actually aiming for was a 
realignment of the entire eco- 
nomic system,” Mr Hurt said. 

What they appear to have 
achieved instead jg the decima- 
tion of a fortune and the humilia- 
tion of a dynasty. 


HONGKONG and Shanghai 
Banking Corporation, the colo- 
ny's biggest bank which last year 
acquired 149 pm* cent of Midland 
Bank of the UK, yesterday 
pushed up its interim dividend 
following strong first-half profits. 

After tax and transfers to inner 
reserves, net profits for the first 
half of 1988 rose to HKSL67bn 
(US$214.6m), an increase of 18.6 
per cent over the comparable 
1987 period. 

An interim dividend of 33 emits 
per share has been declared, com- 
pared with an adjusted 11 emits 
last year. The directors expect to 
pay at least 39 cents in total - an 
effective increase of 13 per cent 
over 1987. 

The results were at the top end 
of stock market expectations and 
analysts said they underlined the 
solid performances being seen 
from the bank's various divisions 
around the world. 

In particular, they noted the 
return to profitability of the 
Marine Midland Bank in the US, 
which became a wholly owned 
subsidiary of thg HongkongBank 
in September last year. 


The six-month period also saw 
the Midland Bank, the UK 
clearer, make its first significant 
contribu ti on to the group. 

Mr william Purves, Hongkong- 
Bank chairman, said the partner- 
ship with the Midland Bank, 
which recently announced 
improved results, was already 
bringing benefits to both parties. 

He added that the transfer of 
subsidiaries between the two 
hanks would continue in the 
coming months, and that by the 
end of the year HongkongBank 
would have transferred, sold or 
closed its operations in continen- 
tal Europe. 

According to Mr Purves, the 
Hongkong Bank of Canada pro- 
duced an encouraging first-half 
performance, and in the Middle 
East results were mixed bnt 
showed some improvement 

Within Hong Kong, the bank- 
ing sector enjoyed steady growth, 
in profits helped by strong loan 
demand. Last week, Hang SftOg 
Bank, HongkongSank's 61 per 
cent owned subsidiary, reported a 
17 per cent increase in profits for 
the first half. 



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Australia^ world bank 


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16 $ 


FINANCIAL TIMES WEDNESDAY AUGUSTS*!'^ 


INTERNATIONAL COMPANIES AND FINANCE 


Deere maintains ITootsie 
profits recovery i $65m f< 


By Matin Stanbrldgg In New York 


THE RECOVERY at Deere, the 
world's largest manufacturer 
of farm equipment which also 


and mitring machinery, contin- 
ued In its third quarter. 

Yesterday the 

group reported a rise in net 
profits to $ 81 ni, or $L 14 per 
share for the three up 

from $25J5m or S8 cents in the 
sane period last year. Saiag 
were *l93m ahead at $L39bn. 

The improvement reflects 
the slow emergence in the US 
of the fann-eqtupment industry 
from the ravages of a decade- 


™ group said fire increase 
in profitability was due primar- 
ily to higher sales and produc- 
tion volumes, some improve- 
ment In the price of its 
products and greater efficiency 


In its worldwide operations. 

The result was also substan- 
tially better because of a strike 
in the year-ago quarto:. How- 
ever. the company added that 
"higher prices of some raw 
materials are partly offsetting 
these improvements.” 

Timiriiw to the final Quarter, 
it said overall production was 
scheduled to be 9 per cent 
above the previous fourth 
quarter. 

North American and over- 
seas production of agricultural 
equipment would increase, 
while output of lawn and 
grounds care equipment 
$l3l.66m. Sales advanced to 
$&£8hn from £L82bn- 

Investors reacted fa vourably 
to the result and in early bail- 
ing yesterday Deere’s shares, 
rose $1 to $42%. 


Apple decentralises 
into four divisions 


By Hodwrfefc Oram in New York 


APPLE COMPUTER has 
decentralised Its operations 
into four autonomous divisions 
so the company can better han- 
dle its rapid growth. 

Mr John ScuDey, who will 
remain chairman and elitef 

executive, is aiming for sales of 
some SlObn by the early 1990a. 
compared with $2.67bn last 
year and analysts* estimates of 
around * 4 hn this year. 

Decision-making eras cen- 
traHasd under lb Scultey when 
lie became chief exec utive fa 
1985 on the depart u re of Mr 
Steven Jobs, one of Apple’s co- 
founders. 

That structure was consid- 
ered appropriate at the time 
because the personal computer 
company was in disarray. 

However, Apple’s subse- 
quent recovery and rapid 
growth in sales wa rra n t a more 
tWihfa approach, the company 
said. 

The reorganisation is similar 
to the one launched by Interna- 
tional Business Machines, the 
industry leader, in February. 

Senior management gave the 
heads of new divisjUms a great 
deal of autonomy by IBM stan- 
dards to try to increase their 
responsiveness to trends in 
technology markets. 

The first of Apple's four new 


divisions is Apple Products, 
responsible for developing, 
manufacturing and marketing 
products. 

Its president is Mr Jean- 
Louis Gassde, former senior 
vice-president for research, 
development and marketing. 

Apple USA win handle US 
sales, service and support, 
marketing to corporate cus- 
tomers and the company's own 
internal information systems. 

Its president, Mr Allan 
Loren, who joined the com- 
pany only a year ago from 
CIGNA, the US insurance 
group, will have the key task 
of broadening the appeal of 
Apple's products to corporate 
customers. 

Apple Education and Pacific, 
under Mr Delbert Yocam, for- 
mer group chief executive offi- 
cer, will cover sales and mar- 
keting to educational 
institutions and sales to all 
types of users in the Pacific. 

Although his duties have 
narrowed, he retains responsi- 
bility for the education market 
which has been Apple’s mam-. 


Apple Europe, under Mr 
Michael SptacQer, former Euro- 
pean senior vice-president, will 
take on European sales, mar- 
keting Htyi support. • 


$65m for 
Charms 

By Deborah Har gr ea v es 

in Chicago 

TOOTSIE Ron Industries, the 
Chicago-based maker of the 
Infamous Tootsie Roll, one of 
the best-known sweets In the 
DS, plans to add more bite to 
its chew with its planned pm 
chase of New Jersey bubble 
gum maker, 

Tootsie, which has built It 
fortune on (he Tootsie Soil, i 
chocolate-flavoured chewy tof- 
fee, will merge with privately 
owned Charms by September. 
r w™« Is best known for its 
Blow Pop (bnhlile-gnnirceDtred 
sweets with a hard taflee exte- 
rior), which should appeal to 
three to 13-year olds - Toot 
ale’s core customers. 

Tootsie, which te set on a 
mqfor expansion drive, says 
the deal to buy Charms, for 
$65m in cash, will extend its 
market share into bobble gum 
and broaden its scope few 
growth. 

“We are a very famous com- 
pany,” declares Ms EDon Gov 
don. Tootsie’s president. “Ash. 
any AnwHam what a Tootsie 
Roll is and they will smile.” 
That is, if they’re not too busy, 
chewing. 

The low-priced toffee roll 
designed “to appeal to the kid 
fa aU of us,” racked up sales of 
some 9114m for Tootsie last 
year on profits of The 

confection has not changed 
since it was produced in New 
York in 1896 by Leo ffirsch- 
field, an Austrian immigrant, 
who named the roll after Ida 
daughter. Tootsie. 

But Tootsie Roll has tried to 
hook into the adult market 
with its acquisition One 
years ago of CeQa Confection, 
which manufactures a more 
sophisticated chocolate-cov- 
ered cherry product. 

Tootsie is still ran as a 
“Mom and Pop" operation, 1 
with a husband and wife team 
In the two top dots. It Is one 
of few confectionery compa- 
nies with its awn sugar refi- 
nery and also runs its own 
advertising agency and track- 
ing company. 

The 90-year did company 
has been looking around Cor 
an lyMdnw for some time. 
“We’ve just become very 
aggressive,” says Ms Gordon, 
w does not rule out an other. 
Mto at an acquisition fa the 


GM in top gear for European challenge 

Kerin Done on the US car maker’s plans for the new Opel Vectra/V anrhall Cavalier 

G gwral Motes of the WIST nmOFMN CM MMHOT SHAMS . ZL35r rdnnta - *gton_h 

IE, the world’s latest — — =-r r,.i.nrr.enr ~~ 

car maker, has Dow- *■*•• "here ' unaJuusaser ht West W 


G eneral Motors of the 
US, the world’s largest 
car maker, has pow- 
ered its way to a dramatic 
flnanriMi recovery in West 
Europe in the past two years. 

ft has punffipsH s fl pie mar- 
ket share in the process, how- 
ever, and ft Is looking to the 
launch of its new mid-range 
car, the Opel Vectra/Vanxhall 
Cavalier which it unveils 
today, to arrest the decline and 
secure its place among the Ug 
six volume car makers jn West 


Total mM 
Rat 

VoAswsgant 


W » 


FQnl 771/M 

CM (OpWVnofialQ TIS^QS 


there - 

Soles • 

Share , 

togjnereeste 

%> 

jkkJm w 

- C%) 

dmWtt (%1 

«*u0 

e^ne^oao 

lean ; 

. +5.1 

ISA 

mjm 

1M 

. +A0 

14j6 

Ml nno 

1U 

+1* 

1Z7 

7 vjns 

11 A 

+1« 

114 

' 771,000 

ll^ 

+« 

104 

routs*-. 

HU 

+M -• 

1ft 1. 

mrepos 

- ms 

+2.1 


cut location of to ft*** 
the UK, Anlwacp 

mansgodto nddm * “SS 

-financial, xwvery JFJSitK 
Europe achieving ft *””* 
iL*2Z** nraiiefon after sevoo 


GaTs volume sales fa West 
Europe, under the Opel badge 
fa continental Europe and 
under Vauxhall in the UK. 
were at a record level fa the 
first six months of the year at 
718,300, but they have still 
failed to keep pace with the 
buoyant European car mar- 
kets. 

Hampered by lock of capac- 
ity for some of Its products, not 
least the small Opel Cor- 
sa/Vanxhall Nova produced fa 
Spain, and by- the ageing of its 
present mid-range car, the 
jpel Ascooa/Vammall Gsvaher 
launched in 1981, the Opeft 
Vauxhall share of the West 
European car market fell to 
108 par cent last year from 10.9 
per cent in 196& 

Its volume sales grew by 2.7 
per cent, co m pared with a 6L3 
per cent growth fa the market 

Xn the first six months of this 
year ft again lost some ground 


peon market leaders, parties- 


lady Flat of Italy and Peugeot 
of France, but also to West 
Germany's Volkswagen. 

' The new Vectra/Cavalter Is 
particularly crucial to Vaux- 
bail's fortunes fa the UK. The 
UK, with 100,000 units, and 
West Germany, with 66,000 
units, last year accounted for. 
70 per cent of CM*s total Euro- 
pean sates of the eodsttag mid- 
range Cavafier/Ascona. 

Especially fa those m arkets, 
the new Vectra/Cavafier has a 
big hole to fill as it repl a ces a 
model which was Europe’s 
best-selling mid-range car fa 

r oft a 10B4 md 1985. 

As the Ascona/CavaHar has 
'aged. Us European sales have 
gradually fallen from a peak of 
357,722 units in 1982 ami 
356^220 fa 1968 to 2S&500 last 
year. 

ft was the Cavalier’s high 
level of acceptance fa the UK 
fleet market which paved the 
way far it to take over from the 
Fold Cortina Hm* tnWafly 
poariy received Ford Sacra as 


the best-celling midrange car 
fa the UK. 

fa 1984 and 1985 It captured 
more **>*” 26 per cent of its 
segment fa the UK market, 
■Suing more than 180JOOO each 
year, and was only beaten into 
second place overall by the 
smaller Ford Escort. 

Vauxhall is faring a mu ch 
tougher market in this seg- 
ment than at the beginning of 
the decade, when than was a 
paucity of new products, ft Is 
stiR afadng to zu$afa riocie to a 
quarter of that segment, how- 
ever, with sales of 130,000 fore- 
cast for 1989 fa a segment 
expected to total around 
560,000 fa the UBL 

The conspicuous success of 
the present Cavalier, which 
helped to take VauxhaTTa over- 
all share of the UK market to 
more flam is per cent fa IBM 
and 1966 front only &2 per cent 
in 1980, has persuaded GM to 
keep the CavaUer name tor the 
new range fa the UK, while fa. 
thereat of Europe ft has opted 


to change to Vectra from the 


Tice new CavaBertVectra is 

-being launched by GM in both 
saloon and hatchback versions 
with a choice of petrol engines 
from 14 faxes trf 1 j 6, L8 and SjO 
litres as well as a top of the 
Una high performance model, 
the Vectra 2000/Cavalier GSI 
2000 with a 16-valve DOHC 
engtna, mod the powdbfltty of 
four-wheel drive. The fours 
wheel-drive system baa been 
developed fa cckmeration with 
Steyr-Daimte^Purii- 

There will also be a 17 Htre 
diesel engine version. 

CM aims to meet Shnoet all 
its UK demand for the new 
Vectra/CavaUer from Its Luton 
assembly plant, where two 
years ago ft installed a £9Qm 
($15l_2m)pafatsbop and has 
quad s farther £3Qm on plant 
and equipm ent. 

Mr Louis Hughes, GM 
Europe’s vice-president for 
finance, says Luton Is the low- 


tton. Vauxhall last year 
in a net profit of 
net loss of £fiL7m fa 
was the 

and only the fourth time the 
company had avoided ton fa 

^^“SmSwMMwy* the co ®* 

pony to on fts way this 
equalling tost yeart record 

taxnch wffl sustain the finan- 
cial recovery. . , a 

It is bring In” 8 ***” into a 
fiercely competitive market, 
however, andtherehave 
already been warnings th at fts 
arrival fa the Buroprommarto^ 
place. and particnJIariy fa the 
tjK market, could toad to a 
renewed bout of “disorderly 
marketing,’* as producers use 
incentives and discounting to 
h fij d on to market share. Ford, 
for one, will not eaaDy mnxea- 
der tbs eegment market leader- 
ship, wfaefc its Sfena has won 
toEurope. 


Management to buy Lear 
Siegler unit for $500m 


CIGNA sells arm for $500m 


By Otar New York Stall 

THE MANAGEMENT of Lear 
Stagier Seating, the Michigan- 
based car and lorry seat mak- 
ing subsidiary of Lear Stagier 
Holdings, the PS conglomerate, 
is to buy out the offshoot for 
6600m. 

The announcement was 
made jointly with Forstmann 
Little, the leveraged buyout 
specialist which put the deal 
together, and Kidder Peabody, 
the Investment banking group 
which Is Joining the manage- 
ment team and financing the 
deaL 

Mr Kenneth Way. Lear Sta- 
gier Seating vice-president, 
who will be the new company’s . 
chairman, said the deal would 
provide capital to invest In 


new plants and develop new' 
products. 

“Acquisitions that comple- , 
ment the company's exist- 
ing ... business wffl also be 
part of our fangtenn strategic j 
plan,” he added. j 

Lear Siegler Holding went 
private fa a s&lbn leveraged 
buyout which was put together 
by FaEstxnann Little early last 
year. 

Kidder said it had committed 
debt and equity financing to 
the unit’s management group 
while Manufacturers Hanover, 
the big US banking groups had 
committed to provide senior 
loan facilities. 


By Our Now York Stall 

CIGNA, a leading 
shareholder-owned US insurer, 
has sold its Horace Mann 
insurance division for $500m 
cash to complete the refocus- 
ing of Its efforts on corporate 
wttiwr than individual policy 
holders. 

The purchaser of the Hfittr 
debased subsidiary is a new 
company formed by Gibbons, 
Green, van Amerongen. a New 
York management buyout spe- 
cialist. Shareholders in the 
new venture Include Mir Paul 
Kardos, Mann’s president, and 
other awrinr executives. 

CIGNA put Horace Mann 
and its Individual Insurance 
Products divtefam cm the block 
tost Angnst as part of a strate- 
gic switch to corpoadecuBtoin’ 


era. It has retained, however, a 
small property-casualty busi- 
ness for individual clients 
within its Connecticut General 
operations. 

InterContinental Ufa, a New 
Jersey-baaed insurer, earlier 
agreed fa principle to boy the 
latter operation for $L4Dm. The 
sale, of Horace Maim, however; 
has proceeded more slowly, 
partly because the insurance 
fadnstxy had a large number of 
operations .far sale at the time 
of tost October’s stock market 
crash. The volume and value of 
In wn n iiH* takeovers has since 
recovered. . . 

CIGNA "seems to have got a 
fair price of about one-an&a- 
baU times book value" for Hor- 
ace Mann, said Ms June Hotter, 


an analyst with Pruden- 
ttal-Bache fa New York. 

Horace Mann, founded fa 
1945 toad named after a US pub- 
lic rifacation. pioneer, sails per- 
sonal Hfe, car and home- 
owners* insurance to 
fadhdAimls ««i groups, partic- 
ularly those invxavBdin educa- 
tion. It has assets of about 
SSm, revenues last year of 
6721» a and had a book vahm of 
8840m on June 80. 

Gibbons, (heap, which made 
an abortiv e attempt at a man- 
agement b uyout test year at 
Argonaut, a West Coast 
insurer, has completed 26 buy- 
outs fa its 19 years of 
m en ti ons. The Horace Mmw> 
deal was undertaken by its Los 
Angelas office. - 



NewJssue 


AH these securities having been sold, (ha annoiawcment appears as a matter of record only. 


July, 1988 


4 



BEST DENKI CO., LTD. 

(Kabushiki Kctisha Best Denki) 

(, Incorporated under the lam of Japan) 

U.S. $200,000,000 

4% PER CENT. NOTES DUE 1993 WITH WARRANTS TO SUBSCRIBE 
FOR SHARES OF COMMON STOCK OF BEST DENKI CO., LTD. 


ISSUE PRICE 100 PER CENT. 


The Nikko Securities Co-, (Europe) Lid, 

Credit Suisse First Boston Limited Dahva Bank (Capital Management) limited 

Daiwa Europe Limited 


Bank of Tokyo Capita) Markets Group Barclays de Zoete Wedd Limited 

Choo Tfrnst I nftrartHwral limited Credit CfHiimerdal^ France 

Dainchi Europe Limited Deutsche Bank Capital Markets Uoiited 

Robert Fleming &C^. limited KleiilWOitBe»S0aiilldted 

Merrill Lynch IntarnriKmal & Co. MStsraTkristliiteriiatiQgi^ 

MorfflQ St alky Tntemaiifgial New Japan Securities Em'ope limited 

ganya Tiyfa rn a«wi«al limited Sanyo loterpatkwMd limited 

SBOSwhsBffi^ Corporation J. Henry Schroder Wagg & Co. Limited 

Tokai Inte m fl tkma lj imte l 
Securities Co. (Etmipe)L^ S. G. Warburg Securities 

WestdeutscheLanderiiffiriKGirozentrale 


Al 


British Airway 8 Pic 
KIM Royal Dutch Airlines 
Swissair Swiss Air Transport Company Ltd. 

(collectively the “European ConsorUnm 1 *) 


USAir Group Inc. 

through subsidiaries have acquired a 19.9% interest in 

Couia Partnership 


from 


United Air Lines, Inc. 


The undersigned atied ax financial admeor to the 
European Consortium in this transaction. 


MORGAN STANLEY & CO. 


Augusts, 1988 


.Sfr iiwa International Limited 
SBCI Swiss Bank Corporation 









17 


FINANCIAL TIMES WEDNESDAY AUGUST 24 i988 


INTERNATIONAL COMPANIES AND FINANCE 


^ 'HU 
1 *;i?» 


*■*■...* I-v 
•- r* -I* '*£• 


' ' Rj... --*■ 

■ m * 

». * * I*.* 

*•'.*• •« 

- - 


«*\jw : • 


r i^A 

- «SL ^ 


• ’ .^r. f ^ ; 

.. t. 

• • . -. r . 


.-ar'ey 


00m 


’*■ e.-* v. 

- va -r 


l.ti 


Huls looks for a higher profile 

Peter Marsh on the aims of Germany’s fifth largest chemical group 

E ither in West Germany prospects for the rest of the presence. Group sales in the mainl y accounted f or by spi 
or outside, the -name year and '-1989. Beyond * hi”, US .this year are likely to be dalty plastics used in eng; 

Hals meets with A hknlr lMWAmr . Mr. RrlnVmanin ia Ahnnt t4Rflm. or dnilhle the neerine’ and other nmdnet 


E ither in West Germany 
or outside, the -name 
Hflls. meets with a blank 
stare from most people. Ur 
Horst Brinkmann, board mem- 
ber for Germany's fifth biggest 
c h e m icals company, says thi« 
sometimes bothers him wnd 
other managers at the group. 

Ur B rinkmann and Me col- 
leagues are, however, doing 
then- best to raise the profile of 
t heir company, if not among: 
the public then in the interna- 
tional industrial community. 

Last year “the company 
splashed out DMlbn ($521m) 
for the chemicals and pisstics 
operations of Dynamit Nobel, 
another Ger man chemicals 
concern. The transaction, 
which involved Hflls paying 
DM4SQm in cash as well as tak- 
ing over debts and other finan- 
cial commitments,' increased 
the ■ group's turnover by 
roughly 40 per cent and added 
9,000 employees to make a total 
payroll of 24410a ... 

Sales this year are likely to 
be between DUSbn and DM9bn_ 
The figure is only narrowly 
behind the sales nf Huniwi, the 
fourth biggest German chemi- 
cals company, although it 
trails by a wide margin the 
sales of the three German 
chemicals giants, Hoechst, 
BASF and Bayer. 

To put the activities of HfUs 
in context — and also to illus- 
trate the strength in depth of 
the German -chemicals busi- 
ness - the company’s turn- 
over is bigger than that of any 
British chemicals concern 
except Imperial Chemical 
Industries. 

Htlls, which has benefited in 
the last year or so both from 
the strength of the German 
economy and the healthy 
dgrmmri in Europe far chemi- 
cals, is optimistic about the 


prospects for the rest of the 
year and -1989. Beyond this, 
however, Mr Brinkmann is 
more- cautious. “After 1989, 
there could be asl ow dow n On 
demand),’* he warns. 

The relative anonymity of 
Htlls is . partly explained by Its . 
being owned by Veba, the huge 
West German energy and 
chemicals conglomerate. 
Veka's breadth of activities 
and total turnover of around 
DM40bn tend to obscure the 
operations of its subsidiaries. ; 

Another reason is that Bills, 
unlike many other chemicals 
companies, sells few' products 
that would be recognisable -to 
the average person other than 
those employed in fine chemi- 
cals, business. Host of fbe L500 
dtifergnt items which it wiAm 

- the list includes a huge vari-- 
ety of det e rge n t i nte r m e dia tes, 
plasticisers, rubber products, 

solvents and: surface coatings 

- end up as. components 
Within goods mimufarfairHl by 
other companies. 

Besides these products, Hflls, 
based on a sprawling site, at 
Marl, in the industrial , heart- 
land of the Ruhr district, is 
also n 'ji HimiMpttf manufac- 
turer of polyvinyl chloride and 
polystyrene, two bulk plastics.' 

If Hills is little known in 
Europe, this is still more the 
case outside the continent 
where, before the Dynamit 
Nobel acquisition, the com- 
pany gained a mere 12 per cent 
of its sales. The position has 
chang ed slightly , with pro- 
portion hkely to increase to 15 
per cent this year, against 50 
per cent for the proportion of 
sales in Germany and .-35 per 
cent for the rest of -Europe. 

The takeover baa particu- 
larly helped Hflls 1 US 
operations, where Dynamit 
Nobel had a reasonably strong 


presence. Group sales in the 
US .this year are likely to be 
about 5450m, or. double the 
pre-acquisition figure. 

The company, with a base m 
New Jersey, has 500 employees 
in the US. It is particularly 



Hog sfrB rinfcm am i: cautions 
about future demand 

S n that country as a 
of special chemicals 
give plastics different 
colours, items used especially 
in the motor industry. 

Mr nrinkmarm gays TTflla Is 
keen to grow further in the US, 
and is considering various 
other acquisitions. This is 
partly, he says, because of the 
general need to expand over- 
seas in order to smooth out 
currency fluctuations affecting 
its financial results and also to 
“pick up an the technological 
Inno vations'* emanating from 
the US market ' 

Another target for expansion 
is Japan, where Hflls has a 50 
per cent-owned joint venture 
with DateeQ, a Japanese chemi- 
cal company. Ibe joint venture 
last year had sales of DMSOm, 


mainly accounted for by spe- 
. dalty plastics used in engi- 
neering and other products 
such as isocyanates. 

Among the more interesting 
products brought into the 
group by the Dynamit Nobel 
purchase are a series of sili- 
con-based chemicals. Unlike 
most- of Hflls’ products, these 
items are derived not from 
hydrocarbons but from miner- 
als in the shape of sand. “They 
give ns a nicely growing range 
of products and reduce our 
dependence on oil,” says Mr 

R ritikmami 

The purchase has also 
strengthened Hflls* position in 
the area of fine chemicals and 
has taken It for the first time 
into the processing of finished 
plas tics parts. 

As for the immediate future, 
Hflls is doing its bit to keep up 
the generally high levels of 
chemicals industry investment 
in Europe. Its spending of 
DM50Qm this year on capital 
projects is more than double 
the company's figure for 1986. 

Hflls is abstracting at Mari 
a DMisOm plant for manufac- 
turing a cry he and acrylic 

esters, important chemical 
intermediates, and is even 
talking about reopening a 
mothballed ethylene cracker 
which it operates jointly with 
Veba subsidiary. 

The recommisioning of the 
cracker, which is at Gelsenkir- 
chen, also in the Ruhr area, 
could add to the supplies in 
Europe of ethylene, which is 
used as a basic feedstock to 
make a host of chemical prod- 
ucts. Demand for the substance 
in Europe has been growing 
steeply in the past few years. 

The company stresses, how- 
ever, that the decisions over 
reopening the plant are still 
some way from being taken- 


Statoil seeks NKr3bn state cash injection 


By Karan Fossil in Stavanger 

THE DEPTH of the. : 

problems at Statoil. Norway's 
state oil company, was unto- 1 
lined this week when it called < 
for a state cash injection of at 
least NKrSbn 9429m) to allow ] 
it to sustain operations on 1 
their current scale. i 

Statoil also wants the money 
to raise its equity capital ratio, 
which has plunged to 10 per 
cent By contrast the majority 
of the international all compa- < 
nies operate with equity of. 
between 50 and. 60 per cent of i 


total capital. 

Mr Herald Narvik, Statofl's 
chief executive, said on Mon- 
day that the. state oil compa- 
ny’s level of capital ratio has 
plunged to 10 per cent because 
of dl prices, which have taken 
a downward turn, and budget 
problems with the Mongstad 
refinery project 

A major budget overspend of 
NKiOSbn in the Mongstad proj- 
ect will force Statoil to make' 
write-offs against accounts for 
the next two to three years. In 


1987 accounts Statoil made 
write-offs of NKr3-3bn and was 
forced to omit its dividend pay- 
ment to the state. 

Statoil told Mr Arne Oefen, 
Norway’s OH and Energy Min- 
ister, in a confidential meeting 
on Monday, that existing state 
guarantees are the only mwmn 
of support allowing it to 
finance its current operations. 

* Statoil has set itself a goal of 
maintaining a capital ratio 
level of 25 per emit, although 
since its inception in 1972, it 




■ - n .---v*-. . __l - • . 



Johannesburg 

Consolidated 
Investment 
Company, Limited 


Qncotporaiad in thn BnpaHic ofSoath Abies— Rag. No. 01/00429/06) 


Highlights from the 
Consolidated Financial Statements 
For the Year Ended 30 June 1988. 

(Unaudited) 


3 


Prom before taxation 


Profit attribu ta ble to 
ordinary shareholders 


Ordinary dividends 


Earnings per share 
Dividend per share 


1988 

1987 

Ban's 

Rm's 

359 JS 

3325 

323.8 

2685 

129.9 

110.6 


4 392 cent* 3641 cents 
1750 cents 1500 cents 


Tlw aimuM report and Chairmaa’sieview wffl be posted to membois on or about 
26 September 1988. 

A Final Dividend (No, 125) of 1 150 cents per share has been declared payable to 
shareholders registered on 16 September 1988. Date of payment will be 17 October 
1988. < Currency conversion date3 October 1988). Holders of share warrants tobearer 
should attend to the temtsofanotice lobe published on cr abouc4 October 1988. 



LondonJEGSMSXE. 
23 August 1988 


Union Bank of Norway 

U.S. $50,000,000 
Floating Rate Notes due 1999 

nokc .k 







has only managed to achieve a? 
ratio of between 15 per cent to 
16 per cent 

Two options to solve Stat- 
ofl’s financial dims are soon to 
be discussed by the Storting 
(parliament). The first calls for. 
the Government to accept a 
lower dividend payment 

The second calls for the con- 
version of a loan, by the Gov- 
ernment to Statoil, to share 
capital The amount of an ini- 
tial loan under discussion is- 1 
between NKx2bn and NKrSbn. j 


Finnish insurer, 
"plans another 
rights Issue 

By OIU Vtrtanen in Helsinki 

SAMPO, the Finnish insurance 
group, plans to raise FM975m 
9220m} through a one-for-two 
rights issue which will 
increase its share ra p ftp ] by 48 
per cent to EMlSSm. 

The Issue price is FM325, 
which compares with the latest 
quote of FM520 on the Helsinki 
Stock Exchange. The subscrip- 
tion period is October 17 
November 18. 

The issue follows a similar 
rights issue in which Sampo- 
raised FM763m in May this 
year. The issue was heavily 
oversubscribed, and this, says 
Mr Kalevi Pihlaja, managing 
director, was one of the main 
reaso ns for the second issue , 
within six months. 

Sampo cha ng ed it s status 
from a mutual insurance com- 
pany a year ago by issuing a 
total of 750,000 shares to all its 
policyholders. It' was subse- 
quently listed on the Helsinki 
exchange. The new shares will 
not be available to foreign 
investors due to a proposed 
law that would cut maximum 
foreign ownership in Finnish 
insurance companies to 40 per 
cent of the equity and votes. 
According to the current law 
all shares in Finnish insurance 
companies are available to for- 
eigners. 

Sampo retains a unique vot- 
ing structure, according to 
which each shareholder has 
only one vote irrespective of 
the number of shares held. 


Ascom Holding 
pays same 

By John Wicks in Zurich 

ASCOM HOLDING, the Swiss 
telecommunications concern, 
is to propose unchanged divi- 
dends for 1967-88 of SFr60 pec 
share of SFrJSOO nominal value 
and SFrl2 per share and partic- 
ipation certificate of SFrlOO 
nflminni value — nn increased 
equity capital. 

Parent com p a ny net profits 
for the year, ended on June 30. 
were SFxSfiJim (JXSJhn), but 
are not comparable with those 
for the previous 12-month 
period. 


Mentor Corporation, Sana Bar- 
ban. Cals form*. 1988 Annual 
Report, mdoding accounts and 
auditor'* suiemni. may be 
obtained, without char g e , during 
normal business boon, at the 
office* oT: 

J. Bcmy SeMer Cm. jjJ 

mChnyAk.lmim BC2M& 


Second big 
shake-up at 
Den norske 

By Our Oslo 
Correspondent 

DEN NORSES CREDITS ANK 
(DnC), the troubled Norwegian 
commercial bank, yesterday 
announced a radical restruct- 
uring of the bank Into four 
main divisions 

The move comes less than a 
year after a big shake-up of 
top management following 
NKrLSbn (S2l4m) in losses for 
1987 on loans and securities. 

The bank was previously 
organised into five divisions* 
DnC will now incorporate the 
shipping, petroleum and off- 
shore division into the indus- 
trial corpor a te division under 
the lrarioraTifp of Mr Pqy plH 
Amkvaern. 

The banking division is to 
be led by Mr Nils Landsnes, 43, 
the current managing director 
of Norwegian Contractors, a 
supplier to the offshore oil 
industry. His appointment 
brings with it the title of dep- 
uty manag in g director. 

Mr Lars Uno Thnlin, deputy 
managing director and the 
current head of DnC London, 
Is to head the bank's interna- 
tional division from next year. 

Mr Eskil Vogt, 45, former 
general manager of Christi- 
ania Rank, one of DnC’s major 
competitors, is to head DnC’s 
investment banking division. 


Notice to Bondholders o* 

ESKOM 

(formally Known as ESCOM) 
Sandlin (Transvaal), 
RapubSc of South Africa 


U.& swogMMHno 

tM par com. Bonds due 1931 


Notice is hereby given that: 

1. Effective 1st November; 1987. 
ESCOM has changed its name to 
ESKOM. 

2. The above mentioned Bonds wifl 
' continue to be listed on the 

Luxembourg Stock Exchange 
under the former name of 
ESCOM tallowed by the new 
name of ESKOM. Each new 
notice to Bondholders wffl con- 
tain both names. 

3. The Bonds wfll not be stamped 
nor exchanged for new bonds. 

4. A legal notice, as well as the 
amendments to the statutory 
documents, wiB be filed with the 
Chief Registrar of the District 
Court of Luxembourg. 

LM0M DE MMQ0CS OKI (UUaBOMM) 

SOCtflt MOKYME 



DEACON MORGAN McEWEN EASSON LIMITED 



Robert Sclater 


is pleased to announce the opening of its 
United Kingdom and European office 

Suite 301, Guild House 
36 -38 Fenchurch Street 
London, England 
EC3M 3DQ 

Tel: 929-5614/18 
Fax: 929-5451 
Telex: 916 940 (Deacon G) 

Maynard Marceau, Managing Director 

Nicholas Powell 


Mark MacLean 


Deacon Morgan McEwen Easson Limited is a Canadian international investment dealer 
specializing in institutional and private client services. The Company prides itself on its 
independence, quality of research and financial strength. 

Toronto, Montreal, Vancouver, Hamilton, Victoria 

London, England - Sydney, Australia 

Members of Toronto Stock Exchange, Montreal Exchange, 

The investment Dealers Association of Canada and The Securities Association (U.K..) 


US $300,000,000 

Scot ia bank S 

THE BANK OF NOVA SCOTIA 

Floating Rate Subordinated 
Capital Debentures Due 2085 

Interest Rata 9Vfe% per annum 

Interest Period 24th August 1988 

24th February 1989 

Interest Amount due 
24th February 1989 

per US. $ 10,000 Debenture U.S. $ 466.39 
per US. $100,000 Debenture U.S, 54,663.90' 

Credit Suisse First Boston Limited 

Agent Bank 


HMC MORTGAGE 
NOTES 2 PLC 
£175,000,000 
Class A 
£14,000,000 
Class B 

Mortgage Backed 
Floating Rate Notes 
Due February 2015 

For the interest period 23rd 
August. 1988 lo 23rd November. 
1988 Lbe Oats A Nows will bear 
imetcsl af 1102188% per annum. 

Interest payable on 23rd 
November. 1988 will amount to 
£33121 .89 per £100000 Note. 
The Class B Notes will bear 
interest al 13.02188% per annum. 

Interest payable on 23rd 
November.1988 will amount to 
£45805632 per £14.000.000 
principal amount. 

Agent Bank: 

Morgan Guaranty Trot 
Company of New York 
London 


This announcement appears as a matter of record only. 


New Issue 


22nd August, 1988 


Bergen Bank A/S 

(Incorporated in the Kingdom of Norway with limited liability) 


¥5,000,000,000 


4 7 4 per cent. Notes Due 1993 


Issue Price 101% per cent. 


Yamatchi International (Europe) Limited Chuo Trust International Limited 


Bergen Bank A/S 









18 


FINANCIAL TIMES WEDNESDAY AUGUST 24 


1988 


INTERNATIONAL CAPITAL MARKETS AND COMPANIES 


Australia relaxes banking regulations 


the AUSTRALIAN 

Government, in a move long 
sought by ths flnandal sector! 
has announced a dual reform 
to the mgnUtiomi nfft wiiny thr' 
cwutry's banks, writes Chris 
Sherwdl in Sydney. 

The changrx remove the out- 
dated distinction between 
trading end savings banks, 
and reduce the amou nt ftm** 
are required to place as low-in- 
terest deposits with the cen- 
tral bank. 

Hr Paul Keating, toe federal 
Treasurer, announced the 
changes in his «wn»i budget,’ 


and said they were “sweeping 
away the last significant de- 
ments of unnecessary regula- 
tion hi the fiMiMfai arena." 

He said they would enhan c e 
the efficiency of the banks, 
remove distortions in the allo- 
cation of financial resources to 

particular sectors of the econ- 
omy, and exert downward 
pressure on interest rates. 

Ihe change to the Statutory 
Reserve Deposits system 
’m«nw trading will no 

longer have to maintain 7 per 
cant of their Australian dollar 
deposits with the Reserve 


Bank, where they receive only 
S per cent interest. 

But once these deposits are 
phased out, over a three-year 
period, the banks win have to 
keep some low-interest depos- 
its with the Reserve Bank. 
These will amount to 1 per 
cent of total HaMIittes exclu- 
ding shareholders’ tends. 

Budget documents indicate 
that this smaller deposit on a 
larger base would result In an 
effective halving of the current 
impost on the The Gov- 
ernment atdd the bank* had 
assured It that the benefits of 


the change would be reflected 
in their interest rates. 

On the distinction between 
trading and savings banks, the 
Government's removal of fth 
simply acknowledges that the 
two exist only as different sets 
Of aCCOUBts within hawking 

groups rather titan as distinct 
structures. 

In a statement .yesterday, 
the Treasury sought to allay 
fears about any impact on 
bousing loans by pointing out 
that lending for housing 
would continue to be very 
attractive for banks. 


Reserve Bank revises capital rules 


By Chris Shantou In Sydney 


THE RESERVE Bank Of 
Australia, the country’s central 
bank, yesterday issued new 
guidelines for the risk-based 
measurement of the capital 
adequacy of Australian banka. 

The guidelines are said to be 
consistent hi all substantial 
respects with those of the 
supervisors' group at the Bank 
of International Settlements In 


But "special features of Aus- 
tralian banking” have also 
been taken into account 
In particular there are some 
changes to the proposals first 
put up in a Reserve Bank dis- 
cussion paper in January. 
These prompted considerable 

flfac n Bgin n at thp thru* and cm> 

tain objections have been 
incorporated Into the new 
guidelines. 

As expected the Reserve 
Bank, in replacing its existing 
re q uirement that hnnim main- 
tain a certain ratio of capital to 
total assets, has stood by the 
minimum capital i tlBBlrfl 


agreed by the Basle group. 

Thus, *»idi Australian bank 
will be expected to have a ratio 
of capital to risk-weighted 
assets of not less than 8 per 
cent, with at least 4 per cent In 
“core capital " 

Gore capital, also known as 
Tier 1 capital, includes paid-up 
shares, general reserves, 
retained earnings and rum-cu- 
mulative irredeemable prefer- 
ence « 1 wi i pt | and {g gg flrigj- 
nally defined. 

But the remaining supple- 
mentary or Tier 2 capital, 
which Includes asset revalua- 
tion reserves, convertible notes 
and perpetual subordinated 
debt, has been expanded to 
frw-Vndo redeemable 
shares and term subordinated 
debt. This latter category of 
capital, however, is not to 
exceed 50 per cent of core capi- 
tal. 

As for the weightings 
accorded to different assets, 
the Reserve Bank has retained 
three broad types of credit 


exposure - to governments, 
’banks all others - and 
five cat e g o ries of risk weights 
- zero, 10, 20, 50 and 100 per 
cent. 

similarly off-balance sheet 
transactions are still to be con- 
verted to balance sheet equiva- 
lents, and there are stffl four 
categories of equivalents - 
100, 50, 20 and zero par cent. 

However, the Reserve Bank 
has mate certain key adjust 

Tfrynfo to Its m-i ghtal proposals. 
In particular: 

• flbrima fin gfy ra v ra nwn ta 
piuM HiiMw t entitiw! and 

Incorporated in OECD coun- 
tries are to have the same 
Weight as clntmg oil rfmflar 
domestic bodies. 

• cn trims on banks incorpo- 
rated in Australia and on 
banks incorporated in OECD 
countries will now have a sin- 
gle wright of 20 per cent, 
whether the rinimw have a 


maturity of up to ox* year or 
beyond one year. 

• The Bank says these stan- 

dards can be extended on a- 
case-by-case basis within the 
Asia-Pacific area as well, “con- 
sfeteratian bring given to inter- 
national standing and the pru- 
dential supervis o ry regime of 
the parent country.” An obvi- 
ous would be Singa- 

pore. 

• Claims on bor ro wers other 
than gn ra rnmgntg or Innbt, 

which are guaranteed by a gov- 
ernment or bank, are generally 
to carry the weight appropriate 
for the guarantor. * 

• The Reserve Bank has also 
simplified the weights allo- 
cated to Hahns on govern- 
ments. And it has extended the 
50 per cent weight far loans 
fully secured by mortgages on 
residential homing, so that it | 
now applies to loans for rental 
housing as well as owner occu- 
pied frpmriwg - 


Johnnies to lift payout 


By Jbn Jonas in Johannesburg 


STRONG PROFITS are 
reported by Johannesburg Con- 
solidated Investment Company 


for the year to June and the 
group pimm to lift its dividend 
from R15 a share to R17.5Q. 

Kamhtg g from gold, plati- 
num and ftfamnm! tiw w ifa iimtii 
were sharply higher, although 
the imp r ov e me nt was partially 
offset by greater expenditure 
on exploration and lower foe 
iwHitii# from nwm paniwa man- 
aged by the mining house. 

Investment income was 
enhanced by special dividends 
di stri b ut ed by the Rand fonte tn 


Es t a tes gnld mftw and Rnsten- 
b ur g Platinum and increased 
toR27L7m (KLO&Tm) from the 
previous year’s Rl91.2m. 

Overall the group’s pre-tax 
profit rose to R350.5m from 
K3328m. After reduced tax, net 
profits increased to R325.7m 
from R274£m to leave per 
share earnings standing at R44. 
« gnhwt R36 a year earner. 

Mr Vaughan Bray, a direc- 
tor, says the outlook for the 
group's mining companies Is 
brighter Sum a year ago 
expects group earnings this 
year to be at least maintained- 


Ashton Mining in reverse 


By Our Financial Stall 

ASHTON MINING, the 
Australian diamond producer, 
reports a 42 per cent decline in 
net profits for the first half of 
1388 with trading hit by cur- 
rency factors and fluctuations 
in diamond shipment timings. 

Equity-accounted net profit 
fell to A$R9m (USSS.7m) from 
AH2m in the first half of 1987 
on sales which declined by 5 
per cent to AttO&n. 

Ashton, which is 46 pm* emit 
owned by Malaysia Mining 
Corporation, st ressed that tim- 
ing and volume differences in 
diamond sales made firsthalf 


ear nln gS mnip a r wmM dHWwilt- 

It said full-year net profit 
would be in it™ with 1987*s 
Af2&3m. 

As in previous reporting | 
periods Ashton declared no 
dividend «nd paid no tax. 

The company's main asset is 
a 38 per cent stake in the 
Argyle diamond mine In West 

Mi'ii AimtraHw 

Six-month output fell to 
15.9m carats from l&Sm. Ash- 
ton’s share foil to 4.4m carats 
from 4.9m, but during the 
period selling prices Improved 
considerably. 


This announcement appears as a matter of record onty. 


June 1988 



Gulf Canada Resources Limited 

U.S. $375,000,000 

Note Issuance Facility 

Arranged by: 

Bank of America International Limited 

Lead Managed by: 


Brazilian 
smelter on 
the auction 
block 

By John Barham 

in Sao Paulo 

PRIVATISATION is rapidly 
becoming a. buzz word among 
Brazilian bankers. Since June 
1987. the Gove rnm ent has arid 
seven, state-owned companies 
for 5287m. B {dans to sell eight ' 
more by the end of the year 
and a further 18 companies are 
scheduled for Side in 196ft. 

Tbe most immediate privati- 
sation test for the Government 
takes place today when the 
state auctioneer will attempt to 
-sell one of Brazil’s whitest ele- 
phants - the copper smelter, 
Cmriba Metals - to the high- 
est: bidder. The auction, baa a 
reserve price of US$67m. . 

Cara flba wa s the brainchild 
of Mr Francisco Pignatari, an 
eccentric millionaire who 
dreamt of making Brazil self 
sufficient in copper. But Bra- 
zil’s comer reserves are tiny 
by world standards and the 
project folded in 1974. Soon 
after, Caraiba. moved under the 
Sta te T npbrrila. 

Now, 14 years and gLSbn of 
taxpayers' money later, the 
Government has derided to put 
Caraiba back into the private 
sector. The company comes 
with borrowings of around 
S250m but a number of today's 
bidders have publicly 
. expressed their conviction that 
Caraiba can be made profit- 
able. 

The task will not he easy. As 
one government official said 
recently: “Few state companies 
approach the foDy of Caraiba. 

IT we can privatise Caraiba, we 
can privatise almost any- 
thing.” 

Amour the 26 state compa- 
nies to be sold between now 
and the mil of next year are a 
aaWtinw of steel mills. three 
railway operations, a petro- 
chemical company, a computer 
company, fertiliser plants and 
a luel distribution network. 
Many of the companies are 
deeply in debt and have a repu- 
tation for poor management. 

Mr Sergio Zendrun, a senior 
gove rn ment official, illustrates 
the . urgency of the privatisa- 
tion programme by stre w in g 
the chronic imbalances within 
the Brazilian economy. 

The private sector, he says, 
has little debL it exports, it 
generates profits and'zs liquid. 
In contrast the pubhc seetor is 
all bnt Insolvent. ’staggering 
under, the weight m some 
tlTObn in domestic exter- 
nal* debt. *Equfl£brhnn can 
only be restored by a migration 
* of Amotions to the private aeo* 

tor,” says Mr Zendnm. "• 

According to bankers, the 
private sector should have no 
trouble absorbing the state dis- 
posals. Under the present 
schedule some f2bn looks set 
to change hands this year and 
next This is a relatively puny 
amount when set alongside the 
|70bn or so of short-term 
money market Instruments 
which the Treasury has bor- 
rowed from the private inves- 
tors. 

Yet businessmen are suspi- 
cious. Government claims 
' about -the attractions of state- 
owned companies have raised 
many local eyebrows. Political 
doubts have also been aired. 

Mr Eduardo da Rocha Azevedo, 
president of the Sao Paulo 
Stock Exchange, says privati- 
sation could bestow monopoly 
power o n a sm all number of 
■ powerful Investors. 

And some politicians are 
actively obstructing the priva- 
tisation programme. In Brazil, 
state companies have long 
been vital levers of political 
influence. Yet time and public 
funds are now rapidly r nim fa ig 
ant 


Dollar issues rise after 
encouraging US data 


By Our EwuHMi r fc Bte Staff : 

BETTER TRAN expec te d US 
inflati o n data for July sent a 
modest wave of relief through 
the dollar bond markets, 
which, when combined with 
the effects of an apparently 
Irrepressible dollar,: boosted 
Treasuries and propped up 
prices on Eurodollar bonds. 

The US Commerce Deport 
mmt said that the key c oa- 
smner price index rose ql§ per 
cent in July; sHghfiy Jess tun 
had been expected- But once 
food and energy prices were 
removed from the calculations, 
the rise was an even more 
modest 0.3 per cent, down 
slightly from the month before. 

While the news proved 
mostly beneficial for long*, 
d ated dollar paper, short -tern 
issues, which constitute the 
bulk of the Eurobond market 
were up about ft points. 

The US Inflation data aided 
D-Mark Issues, with .domestic - 
Bunds paring the day's losses 
to 16 basis paints at the long 
rod from 85 basis points eariter 
in the day. D-Mark Eurobonds^ 
meanwhile, ended the day- 
slightly firmer, with gains of 10 
to 20 basis points. 

The fafinre of tile Bundes- 
bank to raise its key repur- 
chase ag re e men t rate as many 
had expected, also helped senti- 


funds oh virtually identical 


IBJ Finance Co. KV issued a 
faOQm 4-year issue with a cou- 
pon of 9% per cent and priced 
at 101.45 to yield 53 basis 
points over Treasuries, accord- 
ing to lead manager-IBJ Inters 
tiaHmiai- Tha htiwh carry the 
guarantee .of the AAA-rated 
parent, Industrial Bank of 

Japan-,:-.. 

Dealers sai d the proceeds 

d^?%edeal litfijSgBst 
outstancHng issue for IBJ and 

INTERNATIONAL 


But it was the st re n gth of 
the dollar - which held steady 
in the fast of more currency 
sales by the Ehdsral -Reserve 
and Eur o pean central iwnt« — 
that prompted the launch of 
$500m worm Of new paper yes- 
ter day. 

■ The Bank of Japan remained 
conspicuously absent from 
Interve nti o n today, aa it has 
for the past few weeks, leaving 
Japanese investors ixtcreaa- 
ingly confident that there is lit- 
tle c ur rency risk to be had in 
dollars. 

Indeed, dealers said that Jap- 
anese enthusiasm for Hnllur 
paper has pulled spreads of 
Issues from Japanese corpo- 
rates to some of their tightest 
levels ever. 

Two major Japanese hanks 
file market via overseas 
raising 4-year 


wfil be one of the most fiqnid 
for any af'fbe Japanese bank 
names, ft dosed inside Its fees’ 
at lew XX per cent Dealers 
said the issue appears reason- 
ably priced and is attractive 
because the size guarantees 
liquidity. But it often little 
yield pick-up over older IBJ 
bonds, with each of two similar 

hftmte t railing at 62 

and 55 basis paints over Trea- 
suries respectively. 

Abo, Sumi to mo Bank 
tal Markets, the New Yc 
based arm of Sumitomo Bank, 
issued a fltfto four-year deal 
with a 9ft .coupon - priced 
sHghfiy lower at 1QL35. yield- 
ing 52 baste paints oyer Trea- 
suries. The issue carries the 
guarantee oftbe parent com- 
pany and was lead managed by 
Goldman Sadis. 

Also In dollars was a S50m 
three-year lasue for Canada- ' 
baaed lieyai trustCo. The deal, 
which will be ftmgn»h* with a 
8100 m issue launched earlier 
this year, carries a coupon of 
9% and is priced. at 100ft to 
yield 80 basis points over Trea- 
suries. The ori ginal tranche is 
today nfffaring 30 hnk points 
over Treasuries. 

Tha proceeds of Royal Tru- 
atco's deal. ' led by Merrill 
lynch, were said to hove been 
swapped with those from a 


Finance, guaranteed West Ger- 
man-based Tbeslng Group. The 
SFr28m of five-year band issue 
w an intHcated 'coupon of 2ft 
per cent. The warrants are 
exerciseable into stock two 
years after the company goes 

Also. Bank Julius Basr led a 
private placement of bonds 
with going-pnbBc w a rr an t s for 
ABS Pmupen AG, a West Ger- 
man manufacturer of diving 
pumps. The SFz25m five -year 
asm an indicated cou- 

pon of 3ft per cant 


FT DCTERNATIONAL BOND SERVICE 


LhUd m* tte tatert. lalcr miU o w il bowb ft* wOfcb theta It aa adequate secon da ry matto. 


asRui 
srmnns i 


(Sofas prices os August Z3 


MfavNttlemlTVez. 


tear. 

A/S EkmurtfhuM7% 73, . 
A/S Ek8nrtflMM7% 92— «. 

BMC. Bit. FHl 10% 89._ 

B.F.C.E.792. 


cnjum w eBi w 
CUH*9.96. 


X 


iPaclOV 
C.C.CJE7% 91___ 
C.C.C89%95.. 
C.N.CA7%91. 


Ow»L)faml*99L 


Cmlt National 8% 93 

CTotH National 7% 92 

Grant National 7 A, 9J . 

Dwnrfc7%92 

E.E.C.791 

EX.C.7%93. 

EXX.890 

EJ.Bu7%40_ 


0-0% 983 
Otaqiare 

0*0% 1036 
0H)(H« 40-03 
0-*0(i 9.96 
O-KHtlOyM 
0-tOVi 9.98 
- - 9Jfc 

O-MH* 9M 
090% 9A4 

0 - 0 % ions 
o-fa% lore 

040% VJft 
040% 9 JO 
040% 9J.9 
040% 154 

». « w» 

040 % 9 /n 


EX a. 9% 97 

Etac.DcFrMC*99a. 


FW»9 7%97. 

fW«od7%93 

Ftan.ExpLCd. fl<2 92 

Fort Motor DecOt 8 91 

6a Eke CraAt 10% 00. — 

6. MAO. 889™ — 

HalKax BS9>a 90™ 

HotKb8%97 

IUV990.. 


L.T.&Bof Japan 8 91 
l_TXJUfJwMa897. 
SzQLI 


8% 95 

MctramllsTalan9% 93~_— 
MWaGwMrTtt.790 — _ 

Nanny 8% 93— 

PepsiCo lac 7% 93 — 

Portugal 8% W. 


am. 95 % 93 % 

400 192% 92% 

ISO 193% 95% 

100 «0% 90% 

150 192% 92% 

200 199% 99% 

130 92% » 

250 88% 88% 

MO 193% 96% 

1000 197% 97% 

100 1102 183 
113 192 92% 

300. 97% 97% 

15Q 193% 94 

200 199% 99% 

200 95 95% 

in m ft 

130 — — 

500 192% 93% 

100 93% 95% 40% 40% 932 
290 92% 92% 40% 40% 9J7 
350 198% 98% 40%4O% 8 XT 
100 92% 92% 40% 40% 9.47 
150 ’ 97% 98% 0 40% 9,70 

200 94% 94%4O% 40% 9 JO 
200 . 80 88% 

200 191% 92% 040% 9J3 

97% 97%. * " 

96% 97% 

200 1100% 100% 

250 98% 99% 

200 198% 99 

100 191 91% 

1000 199% 100% 

100 194% .95 
200 87% 88% 

UQ 192% 93% 

200 100% 100% 

150 96% 97% 


vmonwaMis 

|92™ 


BtW»ai4%94. 


Eke. Dt Fwsce5% 94—. 
MM5%93.. 


Honmr5% 95 — — . 

Sail ufltaty5% 92™.... . ■■ . 

SM8bM%99 : _■ 

WorMBank5%92. 


35 100% 100% -0% 40% 523 
43 95% 95% -0% 40% 5J3 
m 97% 97% -0% 0 U8 

20 98% 99 0 0 5J8 

30 99% 99% -0% -0% 527 
50 97% 98 0 O 5 JU 

150 201% 102% -0% 0 300 
50 97% 97% -0% 40% 329 
50 101% 101% -0% 40% sre 


AMrage price cfcuge-. On<tagr-0% m week 40 


Alg. 

Am Bank 6% 


Ned. 5% 92 FL™. 
%92FL. 


.1491 AS- 
. Bk.lO%97£- 


BP Capital 9% 93 £ 

BriiU Airway* 10 98 £ — 

GJ.B.CMerMII% 9? Gk. 

Cornu, BkAot. 12% 93A*.— 

CBopLCtr.lWmAV 99 FI 

CDop-Ctr-RaboA 92 FL_ — — 

Tfcf*narfc7%92£Cti — ; 

Bfssmll 95 £,». 




PrwkMlaIOp.8% 94™. 
Qaolas Airways 10% 95— 
Sari ai ri>ew aa lO% 92. — 
StateBkS Aint9% 93— 

SwriEkpUe‘17%9) 

Sued Expend 10 9Z 

1791. 


040% 9J3 
0 40% 9J8 
O OlOJO 
.040% ore 

040% 982 
040% 9.79 
0 40% 8.98 
040%.l0J3 
840% 10X7 

040% lore 

040% 940 
040% 929 
4140% 939 
0 V O 9.43 
040% 938 
0-®% 949 
040% 9.90 
040% 949 


Otuucte Bank 9% 97 

0nUBIUkBU2% 95 AS 

OJS10%98CS 

E.LB8% 93 LF.. 


Hoc. Fran* 10% «C*_ 

Ewatom7%97ECU 

EaroDma 7% 92 FI-.. 


Sweden 7 92 — 
Sweden 8% 96- 
8% 92- 


Vktorian Rap U% < 
worw B«k7 92- 


Bank of America Canada 


Banks and Grantor Elanks: 


Chemical Bank of Canada 


Wqrid Bank 997- 
YWfudaTma Flo 8% 93 — 


200 192% 

300 196% 97% 

125 96% 97 

140 102% 102% 

100 103% 103% 

100 98% 98% -0%40% 9J2 
100*194% 94% O 0*932 
100 199% 100% 040% 9.93 

250 93% 94% 040% 929 

250 191% 91% 040% 9.94 

200 194% 94% -0%4O% 9.79 
200 197% 97% 040% 9^8 

150 10S%106% -0% O 9.62 
300*193% 93% 0 O 936 

300 95% 95% -0% 40% 9.77 
94% 95% 040% 


FnEBm.Qv.Bfc.9% 92 CS 

Ford Cr.Ca*JS;.93C» — 

BIMteCan. 9%93£ 

C.MA.C.9% 93 CS 

CuMAXL9% 92C*.._J 

G.MA.C AM.F1&J490AS 

Hal»axBS10% 97 £ 

■ Imp Chon bide 1008 £_ 


100 


95% 


Bank of America Canada 
Canadian Imperial Bank of Commeme 
Barclays Bank PLC 
Westpac Banking Corporation 
ABN Bank Canada 


Chemical Bank of Canada 
The First National Bank of Chicago (Canada) 

Citibank Canada 
Swiss Bank Corporation (Canada) 
Banque Nationals de Paris 


Mellon Securities Umited/Meflon Bank, N.A. 
Westdeutsche Landesbank Girozentrale 

Dealers: 


Union Bank of Switzerland (Canada) 


Bank of America Irtemational Lfrnited 
◦BC Capital Markets 

SBQ Swiss Bank Corporation investment banking Ltd 

Banks’ and Grantors’ Agent 


Chemical Securities Limited 
Citicorp Investment Bank Limited 
S.G. Warburg Securities 


Bank of America International Limited 
Issuing and Paying Agent 


The First National Bank of Chicago 




Bank of America 


New Zealand 
utility seeks 
NZ$2.5bn 

By Our Fi nanc ia l Staff 

ELECTRICITY Corporation of 
New Zealand is to raise 

NZgLSbn (USgLftm) over the 
next three years through a 
soles of bond tenders which, 
when complete, will represent 
the biggest publicly-listed cor- 
porate bond on the Wellington 
stock market. 

The first tender, for 
NZSzoQm. will take place next 
month. Bank of New Zealand 
n-nfl National Bank of New Zea*. 
land will lead and und er wr it e 
tire issue, which wffl.be closely 
modelled on & 10 per cent. Are* 
year govern m ent bond. 

Next month's issue wffl. be 
the second securitised borrow- 
ing by the state-run ECNZ this 
year. In May the corporation 
successfully launched a ' 
NZSSOQm promissory note. 

The Government turned 
| ECNZ into a corporation last 
year, valuing its assets at 
NZ$ft3bn. The Government , 
wants repayment frar the assets 
•within three years. ECNZ said 
earlier tins year that it expec- 
ted to -have to raise around 
NZ$500m every six months 
| over the next three yeais. 

ECNZ.- which generates 
nearly all New Zealand’s - 
power, expects to repay the 
Government NZ$L4bn in the 
current fiscal year. It plans 
eventually to issue 10 - and 
even 20-year paper. 


Amin prin An- 0ndar-0% am week 40% 


*40% 980 


hwJadiBtiy (HE1093E 

U9WBanklO%9B£ 

Mootiml TfLlO% 93CS-. — 
6h0t8k-D*n. 6% 91 R 


NcwZMral9%93fi... 

New Zealand 7 \ 93 ECU 

0MNn.KtMO3%94AS 

Pnaknttal Fla.9% 07 E 

RW*IBlLScaE10%98Cw— - 

S.D.R. 7% 95 ECU — — 

WxULLbjna. l2£9SKf 


World BwfcS% 1 
World Bank 13% 92 AS.. 


W Otfw das n* VWd 
50 97% 98% -8% -0% 1080 
150 97% 98 -0% -0% 6.22 

150 100% 101-0% -«% 6.07 
20 101% 101% 0 01334 

258 95% 93% -0% 01180 

100 96% 96% 0-0% 10.75 

100 93% 94 -8% -0% 1187 

100 197% 98% 40% 40% 11.26 
100 96% 98% 40% 40% 1334 
, 100 99% 100% 40% -0% 634 
200 99% 100% -0% -0% 687 
100 100% lflI-0%-0% 731 
90 196 96% -0% -2% 11.76 

75 193 93%-O%-0%U31 

70 199% 99% 40% 01282 

130 195% 96 -0% -0% 1084 

101100V 101% 040% 835 

125 196% 97% -8% -0% 1088 
145 96 46% -0% -0% 7.98 

50 1104% 106% 40% 40% 5.97 
75 196% 97 40% 40% 10.81 

100 198% 99% 40% 011.00 

70 92% 95% 0-0% lire 

150 t9 Si S' ~ 11 * - 1 ' u-u 

75 198 98% -0% -1% 980 

50 100% 101 40% 40% 13.47 
10Q 96 96% -0% -0% 1185 

100 94% 95% 0-0% 1086 

60 96% 96% 0-0% U. i 

150 94% 94% -0% -0% 1132 

100 — — 

100 100*2101% -0% -0% 634 
50 199 99% 0 01332 

75 97% 97% 0 -0% 10.88 

150 99% 100% 40% 0 6.07 

100 94% 94% 0-0% 11.00 

200 99% 100% -0% -0% 7.73 
73 102102% 040% 13.09 

8?? -S*« "0% «>80 
125 95% 96% -«% -0% 11J8 
90 99% 99% 0 40% 7 (ft 

50 199% 100% -0% 40% 1233 

“g *5,2%-0%-0% iw 

100 199% 100% 0 -0% 1335 


ArinDw.BK.6f4M 

Arts FloSVS 5492. 

Bnkof TotopMi 99 

Caatral BK.Tu*tay 7 92. — _ 

Coomwrzlank o/v 5% 93 

Paanga lot. 6% 97— - 

£485% 98. 

EXB 6 97 


AJUmc*&LHc8M94£ 

Beslan 91 OS. 
Br1taopia393£_ 


Ctev NUntatm Ctp.91 US— . 

CluenpfSUS 

EEC 3 92 DM. 


£18.6% 96- 
E.LB. 6%97_ 


EJ.B.6% 95- 

Euro.CoJiS* 

&fvnm6%9h. 


Halifax BS 94 £. 

tovEla (ndUrity94£ u . 
Leeds Perm. B/S. 94 £- 

Mldlaad BaafcOl £.. 


EltcD* France 5% 97 
FoOTWfX KrtO.5% 93— 
I4LO.B. 6 97- 


Japaw Ow. 8k. 5% 95. 
Japan Finance 5% 97- 
Iniaad6%97- 


Koraa Dev BK 6% 93 

Malaysia 6% 94 

KaL WgtBK.Pl.C698 

Nippon WFSm 695.^-^ 

Oaten. KoMMc. 5 93__ — 

Partapri 5% 92.. 



200 99% 100% 40% 40% 5.99 
100 100 100% -0% 0 5.78 

100 99% 100% -0% -0% 577 
200 102% 102% -0% -0% 638 
300 99 99% 40% O 556 

200 90% 99% 5 0 631 

150 96% 97% -0% -0% 5.93 
300 98 96% 0-0% 637 

300 99% 100% 0-0% 636 

400 98% 99% 0-0% 6.25 

300 2®2%-103% 0-0% 639 

175 W 97% O O 630 
100 100% 101% 40% 40% 6 JM 
300 96% 97. 040% 676 

200 97% 98% 40% 40% 5.66 
200 97% 98% O 0 630 
300 96.96% . 0 40% 684 

MO 95 95% 40% 40% 6J47 ’ 

300 99% 99% -0% 40% 637 
100 102% 103% -a% -0% 5.94 

150 98% 99% 0-1% 6.40 

300 95% 95% 0 0 684 

« 99% -99% lO% -8% 6U 
300 97% 98% 0-0% 534 

350 99% 100% ©-8% 5.75 

150 . 101% 102% 0 -0% 421 

ISO 96% 86% 40% -0% 635 
300 100100% -0% -0% 341 “ 

ISO 109% 104% 40% 40% 635 
500 97% 48 040% 6.92 UW Sett. 6% 026 


MHEMtt.Sni.593C 

NewZraf—d 597C 

New Zealand 5 01 US 

State Bk. New. 98 US 

tMKad Kingdom 592 US 

Woolwidi EMlt.B5.93C_ 

WoofwfcfiSWE., .... 

Aarege price ctanae-. Oe dap -tore 


_ Citte Cqm 

88 9938 99.4321/07 833 
0 WO-41 10081 22/08 7 

2> W.73 10/10 !037 

99 5322/08 6.94 
■K>% .V7- 05 973031/08 789 
10 100.45 100.3522/08 336 

■ i 2’S S- 80 8^7 

10 99.80 99.9024/08 7.81 
0% 9986 99.91 13/01 1084 
3 9487 9587 11/06 834 

% 99.80 30/09 W 

99.71 99J91 18/00 7 HI 

.S-*® 99.90 4/08 6.98 
jre 10035 100.24 11/08 7.09 

100.05 7/01 7.3. 

0% S9jU 99.67 15/07 502 
10% 99.71 99.7619/08 787 


Alm6%02W- 
Ahe H c eH>6%01US. L 

Aanr. Bmk 7% 02 US 

A *%wBattZ%KUS 

AriesSSCOM 

C8S. Inc. 5 02 U3 

FlJRss3990S--, 

Wrid-SofaBk-2iOW_. 



ZOO «7% 98 

- 99% 100% 


0-01 

0 


Ahotw price di—gtu. Oa dar-fO an wedc-0% 


&S3 

637 


MCA 1*5% 02 W- 


srmmm 

Africa Der.Sle.9 96 — 

Arifa»5(P... 

B.FTaL 4% 98-—™ 

B.M.W.nnJteU. 5 

BritMriaB/S.4%94 

OB lot W/W3«3_- 

5-y9M»ls4% • 

E.I8 4% 98— 

FlfttttrOBJI.4%98 

Ka6eCK74%-4R 


Leeds Fn. B/S. 4% 93 

Malaysia 5% 98 

ManNHCanan.Cn>. 5 95 — i 
(WlowHWeAag.B/S.493 — r . 
Nippon 1ttoAni8% 95_„ 

0estan.Kttk.503 — — . 

RMUHaUoealBk.443-. 

Tkrilatl4% 93 ; 

World Baak 503— 


150flt)l% roi% -0% 40% 4.77. 
10t I00% 100% 040% 4,95 

200 197% 97% 40% 40% 

150 193% 94 0 0 

300 197% 97% 0-0% 

Z2S 1300300%’ 0-0% 

100 197% . 4*. 0-0% 

-150 148% 99 O 0 437 

130 196%. 97 -0 % -0% 339 
150 148% 99 0 40%- 4.77 

200 140 46%-4% -0% 455 

100 148% 9940% 0 580 

1301101%'. M2. 040% 487 
200 197% 97%*)%-©% 4jW 
200 199%. -100 0 0 487 

£ 

200 145%- 95% -0% 0 5.45 

150 140 98% 0-0% 3JS 

<% daj -0% am Witt; 0 


481 
586 
435 
2.99 
0-0^ 581 


MtaoM Camera 2% 94DML. 

; MtWOWlI BU% 02 US 

MltsMferM.2%UUS 

WBtPfcglOE 

NMI Nlpp.Bfc2* 0?lf$ 

. ftWBoTaMW2%020S— _ 

WwdaShlPI K 

RwtoRwls4%03E - 

“ “ 17% 02 £. 


7«BhaL2%0ZU3 
W.IL Grace6% 02 


Ml price Kd 8ffar Agr ptm, 
iMtztiS 10 i« 31 - 39 

” mi ts JS 

Win 

4M 1069. 122% 123% 

wim tS »* 

ij§ 

66.75 65 66 -0% eHf 


• Mb hfarafee an l h OM prer la a M's I 
1 Oidr at aMetariw appnw a price 


SMgtt Boedc Tbe 
8* 


’SS-SS5S 

^ Mtett are 0, us -TS. 

- tlm Cttnept effettlite **P ergHiu 

ta^ nwr Mm mottieeat price 


CtoOm bond trots 

grow- ™ 

J^for thi« ywWrJf^f £ 

S^on o£ 11 per cent and » 
P YSslriha ,1% *InternaUonaI 

band SS 

pon and priced at 10 1%. 

St notK«S: two 

tfcrma are co^nanogers along 
with Hambros hank, saldJ^J 
ptoceeds had been swapped 

foat bond and cunvngjnartK* 
reaction to the budget wm 
muted because much of 
good news hod been widely 

“Equity warrant bond PriceB 
slhraed as much as a half-point 
forsame issues, leaving re dy 
two of tbe seven post 
faatww trading It 1 ”* 1 ** fees. This 
means that co- mana gers are 

having losses of pp to ift 

points on soane deals, suggest- 
W that coupon levels on 
tesues will have to rise still fur- 
fber. 

Nomura fixed the cocqptmai 
its eariier issue of K hiM 
bod Railway at the indicated 
5% level, but said it is ft point 

outside tees at Jess 97ft. 

Two West German compa- 
nies ’ issued bonds with 
sorixdled going-public war- 
rants, toe first foreign borrow- 
era to do so. TDB American 
Express Bank led a public 


• n» Fmoctal'Umn 


"SSfSaS'tPSfTS VM1SX£ Lm,m v m »JST 








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19 


FINANCIAL TIMES WEDNESDAY AUGUST 24 1988 


UK COMPANY NEWS 


Evans Halshaw expands to £3.65m 


By Richard Tomkins, Midlands Correspondent 


CONTINUED BUOYANCY fa 
Uic UK car market helped 
Evans Halshaw. the Btrnxfag- 
ham-based motor dealer, pro- 
duce another strong rise in 
pre-tax profits from £2.41m to 
£3. 65m for the six wwvnth^ to 
cnd-Junc. 

Mr Geffrey Dale, chairman, 
said the group’s acquisitions 
had enhanced earnings but 
most of the growth had come . 
from existing ' operations 
within the company’s three 
divisions — motors, the 
Moprod components operation, 
and contract hire. 

Mr Dale also sounded a note 
of caution over failure trends fa 
the UK motor trade, pointing 
out that the rate of g rowth fa 
car and truck registrations was 
unlikely to be sustained. at 
present levels of u to 12 per 
cent 

Group turnover rose from 


£102L8m to £129. 2m. trading 
profits rose from £JL87m to 
£L37m, and the interest charge 
rose from £458400 to £728400. 

Earnings per share rose by 
47 per cent from U.4p to I64p 
and an interim dividend of 3p ' 
has been set, up from 2p. 

Both the pre-tax profit and 
the 50 per cent . dividend 
increase were forecast by the 
company last month when it 
acttxmpanied the purchase of 
three more Ford dealerships 
with a £L74m rights issue. 

Mr Dale said all the group's 
dealerships - . now numbering 
83 - bad increased The 
Jaguar: and truck businesses 
baa been particularly success- 
ful. while the Ford dealership 
in Preston, the Rover dealer- 
ship fa Hanley and file . BMW * 
business in fOiftwhawi had per- 
formed sluggishly because of 
relocation or reorganisation ■ 


The Moprod distribution 
operation had semi the acquisi- 
tion oS the sole Moprod distrib- 
utor in Northern Ireland fa 
January a nd contract hire was 
benefiting from the steep 
growth fa the fleet size which 
started three years ago. 

“Our trading fa Aug ust i s 
exceptionally strong and gives 
me confidence that the group 
will exceed its objectives far 
the fall year," Mr Dale said. 

• COMMENT 

The spectre ofrisfag Interest 
rates has served to underline 
worries about the sustainabil- 
ity of booming UK car sales 
and Evans Halshaw wisely 
offers its own warning over the 
long-term outlook. But the 
degree of Evans’s exposure to 
new car sales needs to be kept 
fa proportion: Such is the 
group’s spread of Interests 


across the motor trade that its 
chairman reckons new car 
sales would have to drop by 5 
per cent before its own pre-tax 
profits began to fail- As with 
house prices, however, the 
present consensus is that a 
slowdown fa the rate of 
increase Is more likely than a 
d e cl in e : And against this back- 
ground Evans Halshaw is 
establishing itself as cue of the 
City’s favourite motor distribu- 
tors. The dilution produced by 
last month’s rights issue chal- 
lenges the company to come up 
with mare strong acquisitions 
of the UBM Motors variety to 
sustain above-average earnings 
growth next year, but with 
around £9J5m in sight this 
time, the prospective multiple 
of 9.7 at yesterday’s 348p puts 
the shares at a premium to the 
sector and indicates the mar- 
ket’s confidence. 


F arnell unveils bid for Wayne Kerr 


By Philip Coggan 

FARNELL ELECTRONICS, the 
Leeds-based electrical compo- 
nents distributor, yesterday 
announced the long-awaited 
bid for one of - its suppliers, 
Wayne Kerr, Bognor Regis- 
based electronic test equip-, 
meat manufactures'. 

A bid from Famell has been 
rumoured ever since November 
1986, when it bought a 6.26 per 
cent stake in Wayne Kerr, 
increasing its holding to 10 per 
cent the following year.. - 


Yesterday’s cash offer values 
each Wayne Kerr share at llOp 
and the whole company at 
£lL6m. There is a share alter- 
native of two Famell shares for 
every three in Wayne Kerr, 
valuing each of the. latter at 
lOOp, based on last night’s dos- 
ing Famell price of 150p, down 
2p. Wayne Kerr's ' shares rose 
7p to 107p. 

USM-quoted Wayne Kerr has 
had a mixed profits perfor- 
mance afaoe.it Joined the mar- 
ket in 1985, via an aflfer-forsale 


which valued each share at 
130p. Although profits rose by 
£200,000 to £L3m fa 1985, prob- 
lems in the US caused a fall to 
£553,000 the following year. 

Yesterday, the group 
announced an increase In 
interim pre-tax profits from. 
£261400 to £501,000 fa the six 
months to June 30. Profits on 
continuing businesses 

inrrpa^ffd roily marginally from 

£485,000 to £501400, although 
earnings per share doubled 
from L5p to 3p. 


Famell was the subject of 
some controversy earlier this 
year when it decided to treat 
losses on its equity invest- 
ments as an extraordinary, 
rather than an exceptional, 
item. 

The group’s auditors wanted 
to treat the item as excep- 
tional, which wonld have 
knocked FarneQ’s pre-tax prof- 
its, but after a dispute, the 
auditors decided not to qualify 
the accounts. 


Irish Distillers receives 
further approaches 


By Lisa Wood 

IRISH DISTILLERS, distiller of 
Bushmills and Jamesons whis- 
key,- said yesterday it was 
examining a number of 
approaches in addition to the 
I£253m (£2I2m) hostile bid from 
Grand Metropolitan. 

The company refused to say 
whether they were possible 
offers or businesses seeking a 
substantial minority stake to 
block the bid from GrandMet, 
which is offering l£4 per share 
or guaranteed loan notes. 
GrandMet, which was buying 
in the market yesterday, is 
understood to have taken its 
stake to about 44 per cent 
■ Analysts .were pooled as. to 


which of the major drinks com- 
panies Irish Distillers could be 
talking. Pernod-Rlcard has 
announced It is not pursuing 
the company. Guinness, 
ADied-Lyons, Bols, and Sun- 
tory are understood not to be 
in the running. Seagram, the 
Canadian group, was making 
no comment yesterday. How- 
ever it sold a stake in Irish 
Distillers a year ago and 
through a distribution agree- 
ment recently struck with 
GrandMet it would have access 
to the whiskey brands should 
they be acquired by GrandMet. 

The bid is likely to .be 
referred. 


BMO’s agreed Varo bid 
blocks United Scientific 


By Clay Harris 

UNITED SCIENTIFIC 
Holdings, defence equipment 
manufacturer, last night was 
considering its response to a 
rival. agreed bid for Varo, the 
US maker of. night-vision 
equipment which United Scien- 
tific has . been stalking for 
neariysix months. 

fa early trading fa New York 
yesterday, Varo shares were 
$2% higher at 125%. The rec- 
ommended $2> offer from IMG 
Delaval values Varo at f ii2m 
(£6 6.7m). 

Last week. United Scientific 
raised its bid to $22 per share, 
from the $1740 which had been 
on the table since February. 


Varo’s agreement with IMO 
contains provisions intended to 
inhibit new bids. For examp le, 
the offer depends on IMO 
receiving two-thirds of Varo’s 
shares outstanding an a fully 
diluted basis. Varo will pay 
New Jersey-based IMO 83m 
under certain circumstances fa 
which the merger is termi- 
nated Or the bid TmKiirapRKfiil 

In addition, Varo agreed' 
to grant IMO an option on up 
to 835450 authorised, but unis- 
sued shares at S25 each. 

Analysts do not believe there 
will be any US anti-trust barri- 
os to the IMO-Varo deal 


J. 


This announcement appears as a matter of record only 



MAXWELL 

COMMUNICATION CORPORATION pic 


has acquired 

IBM's wholly owned subsidiary 


SCIENCE RESEARCH ASSOCIATES (SRA) 


and. its subsidiaries in Australia, Canada and 
in the United Kingdom 


for 

US $ 150 MILLION 


The financing has been arranged and provided by 


DRESDNER BANK AKTIENGESELLSCHAFT 
-London Branch- 


o 


July 1988 


HongkongBank 

The Hongkong and Shanghai Banking Corporation 

Incorporated in Hong Kong with limited liability 


1988 Interim Report 

The Directors announce that the unaudited profit for the six months ended 30 June 1988 attributable to the 
shareholders of the Bank was HK$1,674 million (1987: HK$1 ,412 million), an increase of 18.6/7ercem. The profit was 
arrived at after providing for taxation and after making transfers to inner reserves. 

The Directors have declared an interim dividend of HK$0. 13 per share (1987: HKS0.11 adjusted), resulting in an 
increase in distribution per share of 18.2 percent. The dividend will be payable on 29 September 1988 to shareholders 
v^hose names are on the Register of Shareholders on 28 September 1988. It will be payable in cash, with a scrip 
alternative, in accordance with arrangements previously annou need . 

In Hong Kong the pace of economic growth was strong during the first half, but exports increased at a more modest 
rate. Inflation remains a cause for concern, and there are signs of overheating in the property market, but overall the 
economy performed well. The stock market continued to recover and the US dollar exchange rate was stable . The 
banking sector, helped by strong loan demand, enjoyed steady profit growth . 

Elsewhere in the region most major economies grew satisfactorily, and the Bank’s traditional operations prospered 
accordingly. In the Middle East results were mixed but showed some improvement. In North America Marine 
Midland Bank returned to profit and Hongkong Bank of Canada produced an encouraging performance. The 
operating results of Wardley, the group’s merchant banking arm , were in line with expectations. The James Capel 
group continued to operate profitably but their results, and those of CM&M, were adversely affected by difficult 
trading conditions. Other group subsidiary and associated companies performed satisfactorily. 

Midland Bank, in which the group acquired a 14.9j*rr cent interest last December, recently announced improved 
results and the partnership is already bringing benefits to both parties. Business links have been strengthened and 
agreement has been reached on the transfer of a number of branches and subsidiaries. Some of these transfers have 
already taken place and others will be completed in the coming months. The group has now absorbed the Midland 
operations in Singapore, Korea and Canada and will have transferred to Midland, or sold or closed, the Bank's branch 
operations in continental Europe by the end of this year. 

In April the Bank sold its branches in Fiji, Vanuatu and the Solomon Islands to Westpac Banking Corporation; and 
last month, in accordance with itsstrategy of further strengthening the group's capital base, the Bank placed £150 
million of long-term subordinated loan capital with a number of international financial institutions. 

While there may be some slowing down in the second half of the year, your Directors expect profit trends will allow 
them to recommend a final dividend for 1988 of not less than HK$0.26 per share, equivalent to an increase of 
approximately 13.0 percent in the dividend per share distribution over 1987. 

Consolidated Profit and Loss Account (unaudited) 


6 months to 

30 June 1987 


6 months to 

30 June 1988 


HK$m 

Net profit of The Hongkong and Shanghai Banking Corporation 

HK$m 

£m 

US$m 

1,454 

and its subsidiary companies 

1,737 

130 

222 

136 

Share of net profits of associated companies 

146 

11 

19 

1,590 


1,883 

141 

241 

(178) 

Profit attributable to minority interests in subsidiary companies 

Profit attributable to the shareholders of 

(209) 

(16) 

(27) 

1,412 

The Hongkong and Shanghai Banking Corporation 

1,674 

125 

214 

(159) 

(566) 

Transfers to reserves by subsidiary and associated companies 

(208) 

(16) 

(27) 

Interim dividend 

(679) 

(51) 

(87) 

687 


787 

58 

100 

2,744 

Balance brought forward 

3,912 

292 

501 

11 

Exchange adjustments ... 

7 

1 

.2 

- -3;442 - 

Retained profits carriedforward • ■ 

4,706 

351 

- ~603~ 

HK$0.29 

(adjusted) 

Earnings per share _ 

HKS0.32 

£0.02 

US$0.04 

HKS0.11 Dividend per share 

(adjusted) 

Consolidated Balance Sheet 

HKS0.13 

£0.01 

US$0.02 

SI December 1987 
(audited) 

30 June 1988 
(unaudited) 


HK$m 


HK$m 

£m 

US$m 

11,818 

Share Capital 

13,063 

974 

1,674 

2,076 

Share Premium Account 

892 

67 

114 

15,493 

Reserve Fund 

16,054 

1,197 

2,057 

3,912 

Retained profits 

4,706 

351 

603 

33,299 


34,715 

2,589 

4,448 

2,743 

Minority interests in subsidiary companies 

2,909 

217 

373 

18,650 

Loan capital and preference shares 

18,723 

1,396 

2,399 

54,692 


56,347 

4,202 

7,220 

22,504 

Hong Kong currency notes in circulation 

23,894 

1,782 

3,062 

745,228 

Current, deposit and other accounts 

791,970 

59,058 

101,490 

1,229 

Dividend payable 

679 

51 

87 

13,747 

Acceptances on behalf of customers 

14,916 

1,112 

1,911 

837,400 


887,806 

66,205 

113,770 

207,812 

Cash and short-term funds 

241,203 

17,987 

30,910 

65,418 

Time deposits with banks payable within twelve months 

61,337 

4,574 

7,860 

30,742 

Trade bills discounted and bankers' certificates of deposit purchased 

34,291 

2,557 

4,394 

22,444 

Hong Kong Government certificates of indebtedness 

23,834 

1,777 

3,054 

46,952 

Investments 

50,263 

3,748 

6,441 

427.211 

Advances to customers and other accounts 

438,852 

32,726 

56,238 

800,579 


849,780 

63,369 

108,897 

2,452 

Investments in associated companies 

2,594 

194 

332 

16,626 

Bank premises and other properties 

16,537 

1,233 

2,119 

3,996 

Furniture, plant and equipment 

3,979 

297 

511 

13,747 

Liabilities of customers for acceptances 

14,916 

1,112 

i,911 

837,400 


887,806 

66,205 

113,770 


Closing of Register of Shareholders 

The Register of Shareholders will be closed from 12 September until 28 September 1988 (both dates inclusive). In 
order to qualify for the interim dividend, all transfers (accompanied by the relevant share certificates) must be lodged 
with the Registrars not later than 4.00 pm on 9 September 1988. 

Directors’ Interests 

At 30 June 1988 Directors and their associates had the following interests in the shares of the Bank. Except where 
otherwise indicated, these interests were beneficial interests. 


KW Barker 

9312 

KSLi 

1,684,716 

J R H Bond 

25,611 

CW Newton 

5,782 

DE Connolly 

458360 

W Purves 

84,277 

LSDunn 

21,345* 

H Sohmen 

989,100: 

FR Frame 

52,959 

JJSwaine 

683 

R R Frederick 

28,160 

JCCTang 

33.000 

J M Gray 

31.766 

G A Thompson 

11,000 

DGJaques 

53,659 

P J Wrangham 

116,011 


: non-beneficial interests 

As Directors of Marine Midland Bank, N. A.. J R H Bond, F R Frame, R ^Frederick, N R Knox. W Purves and G A 
Thompson each had a beneficial interest in 10 shares of common stock of that Company. 

By Order of the Board 
RG Barber 

Secretary Hong Kong, 23 August 1988 








- - t \ _ A •* > « 




financial 


ttv.pc Wednesday auoust 24 im 


UK COMPANY NEWS 


[ftext expands Snto garden products 
with £2.9m acquisition of G T Sutton 

NEXT, the retail group, yesterday announced that it is buying a ■ 
90 per cent interest in G T Suttcn, a small horticulture company, 
for £2.9m. 

Next says that the acquisition is part of a declared policy of 
expanding into the sphere of gardening and garden-related prod- 
ucts, and is also consistent with its policy of underp inning its 
supply source. 

Sutton is principally involved in growing and marketing rose- 
trees and garden-shrubs and plants. Yesterday afternoon, no one 
was available to elaborate at Next 
The acquisition price will be met by the issue of L12m Next 
shares and £287.545 in cash. 

PgViPEflPS ANNOUNCED 

Correa • Total Total 

Currant Date of ponding for last 

payment payment dividend year year 

Cambridge Elect. Int 2.65 Nov 1 2.4 - 8.5 

ESC Group § Int 3.6 - Z32T - 7 

E&S investors Int 0.65 - 0.55 - 1.7 

Evans Hafshtov int 3t Oct 7 2 7 

Fed. Housing ini 25 Oct 31 1.7 - 5 

Front Group Int 4 - 3-7 

Ufa Sciences Int 0.5 Oct 18 0.3 - OS 

Lend and St Law — int 2.1 6J - 1.46 — — 

NB Int 1.8 Jan 3 1.65 - 5J5 

Pteaeurama int JL25t Oct 12 2 ”5 

Scand. Sank Int 2-82 Oct 6 2.7 - 8 

Taylor Woodrow int 3 -23-10.5 

Temp. Galbraith int 3.5* Oct 10 3.5 - 10 

Dividends shown pence per share net except where otherwise stated. 
‘Equivalent after allowing for scrip issue. tOn capital increased by 
rights and/or acquisition Issues. §USM stock. §§Un quoted stock. ♦Third 
market. *US cents throughout f Includes special payment of 0.6p. 

BOARD MEETINGS 


Mecca Leisure chiefs launch scathing attack on bid target’s half year results 

Pleasurama advances by 38% to £22.5m 


By David Waller 

PLEASURAMA, the casinos, 
holidays and slot-machine 
group fi ghting a £750m take- 
over bid tram Mecca Leisure, 
yesterday announced a 38 per 
cent rise In pre-tax profits for 
the six months to the end of 
the June. 

Although broadly in line 
with brokers’ expectations, the 
increase In profits - from 
£l&3mto£2&5m - came in for 
scathing criticism from Mecca. 

Mr Michael Guthrie, chair- 
man and chief executive of the 
predatory company, claimed 
that the figures reflected the 
“ Hi cappfvfntlwg performance” of 
both Pleasurama's core busi- 
ness and aegraritton strategy 
over the last two years. 

Mr Jeremy Long, Mecca’s 
finance director, expanded on 
this, painting out that the pre- 
tax profit was struck after capi- 
taHmg interest of £i.23m. Fur- 
thermore, he claimed that the 
true basis of comparison 
KfrnnM be the first half of 1986, 


not the first half of 1987. 

Yesterday’s figures showed a 
20 per cent Improvement in 
earnings per share, from Up 
to 8.1p. Mr Long said that 
invertors should focus on the 
535p Ttiptfr in the first half of 
1986. 

“Last year’s earnings were 
heavily depressed because of a 
fan-off in the casino market,” 
he said. They had no such 
excuse in 1986 and it is disturb- 
ing that earnings ahonid have 
increased by only 10 per cent 
over two years. 

"This is despite spending 
well-nigh £150m on acquisi- 
tions ove r the p eriod. Th e flg- 
ures just prove what we have 
said all along - that Plea- 
snrama have made a series of 
expensive acquisitions which 

have had hardly any impart nn 

earnings." 

Mr Barry Hardy , Plea- 
surama’s development director, 
retorted by saying that the 
group had been transformed 


Tim Inflowing co mpani es have notified daunt 
of board moeUngs to the Slock Exchange.' 

Such medUnge on, usually hold for ffte pur- 

pose of considering dividends. Official Indies- 
Uons ore not availabfo as to wheifisr the 
dividends are Interim* or finals and tile sub- 
divisions shewn below are based mainly on 
last year's timetables. 


TODAY 

rnterlms- Barr A Wallace Amok} Trust. Han. 
son, Jourdan (Thomas), Pennine Optical, 
Queens Moat Houses, RKF, VIctauJIc, Wales 
City of London. Weir Group. 

Finals- SeJecTTV. Trans-NetaJ Coal Corp. 


American Trust 

Aspen Communications „ 

Bank of Scotland 

ErBh _ 

Guinness 

Hans, Homes 6 Gardena . 

Ibnocfc Johnsan — 

Lambert Howarth — 

Plckwfc* 

Robinson Brouters 

T ronoh Mines _ — 

Coronation Syndicate — 

Goodbead Print 

Wghgaiea Job 

News Corp. ..... 

Nows Inti 

Tweafontaln Utd Coderlea 


Investment business fall 
hits Scandinavian Bank 


TRINIDAD AND TOBAGO 

The Financial Times proposes to publish this survey on: 

MONDAY 3RD OCTOBER 

For a full editorial synopsis and advertisement details, please contact 

NIGEL BICKNELL 
on 01-248 8000 ext 3447 

or write to him at: 

Bracken House 
10 Cannon Street 
London 
EC4P 4BY 



By David Barcfcurd 

SCANDINAVIAN BANE 
yesterday announced pre-tax 
profits of £U.4m for the six 
months ending June, well 
above its pre-tax profit figure 
of £517,000 in June 1987, when 
file bank made exceptional pro- 
visions of £14m to cover losses 
on developing country debt. 

This year there were no 
exceptional provisions. How- 
ever, excluding the debt provi- 
sions of June 1987, a compari- 
son of this year's pre-tax 
p ro fi ts to June with those of a 
year ago shows a fall of £3 Jin. 

Mr Garrett F Bouton, manag- 
ing director, said the fan in 
profits resulted from a decline 
in business by the bank's 
Swiss-based global investment 
management operation. 

"Operations in our other 
three business have improved 
since the start of file year,” 
and Scandinavian is now build- 
ing up its merchant bank and 
corporate financial services 
arms and has formed a team to 
specialize in trading devel- 
oping country debt," he added. 

Since January Scandina- 
vian's capital resources have 
grown from £217Bm to £257.6m. 


Security Services 
Maintenance Services 
Auction Services 


"The first half of 1988 has produced 
record results in a period of 
consolidation following last year’s 
acquisitions of BCA and ADT". 

Michael A Ashcroft 
Chairman and President 


ADT 

interim 

results 


Interim Results 
ToJune301988 


Net sales 


Earnings from operations 
before interest and income taxes 

Net interest 

Earnings from operations 
before income taxes 

Net earnings from operations 

Net earnings per common share 

Net earnings per ADR* 

‘Each American Depositary Receipt (“ADR") 
represents 10 common shares. 


Unaudited 
6 months 
to June 30 

1988 

US$m 

916.8 


98.0 

117.9) 


Unaudited 
6 months 


Audited 
year ended 


to June 30 December 31 


1987 

US$m 

431.3 


1987 

US$m 

1.234.4 


133.5 


155.4 


25.1c 


$0.93 


$0.79 



For a copy of the 1988 
Interim Report, apply to: 
Prospect House 
The Broadway 
Famham Common 
Slough SL2 3PQ 



Barry Hardy - group has been transformed. 


over the two- year period . “We 
are now a much mare diversi- 
fied group,” he said. "IFa like 
comparing ohaik with cheese.” 

He pointed out that the basis 
of the group’s strategy had 


been to move away from over- 
dependence an fickle e a rn i n gs 
from e ntdryw- If earnings had 
improved by only 10 per emit 
in absolute terms, their quality 
was enhanced immeasurably. 


Answering Mecca’s criti - 
ci-gnia about Interest cap i t a Us a - 
tton, he said that this related 
to a number of development 
projects and was a perfectly 
reasonable treatment, given 
the company’s recent move 
into property. 

Group turnover rose 43 per 
cent to £M&08m, and trading 
profits rose by 56 per cent to 
£27.4m. London casinos did 
particularly well, increasing 
their contribution from £&33m 
to 27.46m; hotels and holidays 
also did well. rising from EL3m 
to £4.48x0. There was a faUstx 
months' contribution from 
President Entertainment, 
accounting for t he r ise in 
caierizig/senend leisure profits 
from £OJ32m to £S3 3 tt. 

The interim dividend was 
raised by 13 per cent to 2-2Sp; 
the shares edged down lp to 
246p ahead of today’s posting 
of the M ecc a offer doc ument . 

See Lex 


Crash leads to midway setback 

for Templeton, Galbraith 


with reserves up from £28.8m 
to vaa_im and loan capital up 
fay 82 per cent to £10&3m. 

Minority interests have been 
reduced from £273m to £2S.7m, 
while shareholders' funds have 
risen from £131 ,4m to 21265m. 

The bank's balance sheet has 
shrunk, according to Mr Bou- 
ton, partly because of a deliber- 
ate decision to emphasize 
return on assets but also 
because of the effect of cur- 
rency fluctuations on its mul- 
ti-currency operations. 

Liquid and short term assets 
were up to £814m (£644zn), but 
deposits of less than one year 
with other banks were down to 
£488xn (£836m). Loans and 
advances were £L45m (21.48m). 

Acceptances were £75m 
(£125m) and fixed assets and 
other accounts were £154m 
( 2161 m). 

The bank transferred 25.4m 
to reserves (25.6m t ransfe rred 
from reserves). Earnings per 
multicurrency unit in which 
the bank’s capital is denomi- 
nated woe 9.7p (loss of 4-7p) 
and a dividend of 2B2 per unit 
was declared (2.7p). 


By David Walter 

TEMPLETON. Galbraith & 
Hansberger, Nassau-based fund, 
management group which 
Joined the London stock: mar- 
ket in 1984, yesterday repotted 
pre-tax profits down from 
$26 .56m to $2l.62m (£l2£7m) in 
the six months to the end of 
June. 

Mr Tom Hansberger, chief 
executive, yesterday that 
tire fall in profits was regretta- 
ble but inevitable in the after- 
math of last October’s market 
correction. 

He drew solace, however, 
from the fact that funds under 
management had actually 
grown in the last year, and 
said the group had taken 
advantage of pok-crash condi- 
tions to shift the emphasis of 
its business. 

At the end of the half year, 
the group was managing assets 
of $12-9bn, compared with 
$l2ibn on June 30 2987 and 
$10.4bn this January- Of the 
first half total of $12ifon. some 
$l.7bn was new money raised, 
compared with $L3bn of new 
funds attracted In the first six 
months of 1987. 


Mr Hansberger said that 58 
per cent of the new money 
came from public underwrit- 
ings of closed-end mutual 
funds (akin to investment 
trusts in the UKX for which 
Templeton receives no commis- 
sion. 

Although there had been a 
substantial drop in commission 
generated by sales of mutual 
funds to the public, this had 
been offset by higher fee-in- 
come based on the enlarged 
funds under management. 

Turnover fell by 24 per cent 
to $51.97 m. Mr Hansberger 
attributed this to the fall in 
gross commission, which 
accounted for 39 per cent of 
turnover against 57 per cent a 
year ago. 

Earrings per share fell from 
13.8 cents to 1LB cents; the, 
interim dividend Was pegged at 
35 cents a share. 

• COMMENT 

The drop in Templeton’s 
earnings was the first in the 
. group’s history, according to 
Mr Hansberger yesterday. 


Under the circumstances, it 
was hardly surprising and the 
shares failed to react, closing 
unchanged at 126p. The figures 
suggest that Templeton has 
adapted with some agility to 
post-crash conditions, moving 
away from the retail side of the 
business and introducing 
fixed-income rather than 
equity funds. Not only did dis- 
tribution expenses fair dramat- 
ically as a result, but there was 
a significant shif t away from 
gross commission income 
towards higher quality invest- 
ment advisory, management 
and service fees. This is 
encouraging, and the group 
should make $44m in the full 
year, putting the shares on a 
prospective multiple of around 
9, underpinned by a 6.5 per 
cent yield. But it remains to be 
said that only the most 
devoted exponent of the con- 
trarian theory of investment 
would buy the shares now, 
even though: they stand well 
below half the price they 
achieved a year ago. A surge in 
the US dollar would help senti- 
ment, though- 


Berisford 
bid for 
Billingsgate 
hits snag 

By Paul Cft w« lght» 
Property Correspondent 

THE BID by a S & W BeWW 

subsidiary to buy 

erence «hare» of BQBngsgate 
Oty Securities »»&***«- 

Kuwiit SomlDM* 

buying the 

share, compared wl 1 * 1 the 
Berisford offer price of ISOp- 
A acrid of purchases, row- 
dieted by Monday evening. 
Sited the UBS Nominees stake 
Cron, 5L2 per cent to 9.2 per 
cent Once UBS Ncanhwos tot 
the market the share price 
slipped back to I33p 
Tfcaalm of UBK Nominees is 
evidently to force a substan- 
tially higher offer out of 
Erlanger Commercial, the 
Swiss unit being used by 
Berisford to mount the otter. 
But charterhouse Bank, which 
Is HawiUttfr the offer for Erlan- 
ger, said the offer price was 
believed to be fair. 

-The Billingsgate preference 
shares are one of three layers 
of securities issued in Jaw 
1986 to form a single asset 
rty company based on 


City of London office building. 
Berisford held all the ordinary 
shares and there was a deep 
discount bond. The preference 
shares, quoted in London since 
jane, are the only single asset 
property company securities 
available on the market. 

The pre f e r ence shares, origi- 
nally listed in Luxembourg at 
106p, have never been actively 
traded and that is one reason 
why Berisford mounted the 
bid to mop np the issue. It has 
control of 52 per cent or the 
issue. But independent direc- 
tors have not advised share- 
holders to accept the offer. 

pn«natMl Montagu House was 
valued at £X10m last March 
and this figure is the basis of 
the Erlanger offer. However, 


bnfldlng to be worth 2145m. 
giving the preference shares a 
net asset value of 178p. 

It added that its view was 
shared by another, unnamed. 
City institution. Together the 
two account for 15 per cent of 
the preference shares. 


- f 

■* . * 
: M • 5 

. . i 


This announcement appears as a matter of record only 

Management Buy-Out 
of 


O 

cq jA f 


GROU.P 

for 

£55,200,000 

SYNDICATED DEBT FINANCING 

Arranged and underwritten by 

Standard Chartered Bank 

Participants 

Bank of Scotland 

Banque Frangaise du Commerce Exterieur (London Branch) 

Barclays Bank PLC 
Canadian Imperial Bank of Commerce 
The Industrial Bank of Japan, Limited 
National Westminster Bank PLC 
Socidte Gdndrale 

Standard & Chartered 


July 1988 





f 


FINANCIAL TIMES WEDNESDAY AUGUST 24 1988 


21 


or 


^ s £u ( . 




■ S' , 

*- .«-i .. 


■ * V. 


•“ f'. 


•'- r >r- 


" 'hr 

I . 




1. 


■ l 

e • •. 
■* Vf*-* 


.» •••■ \ - 


• •• 


w C 

r 


*f r;: 





CAMBRIDGE 

ELECTRONIC INDUSTRIES PLC 

INTERIM RESULTS 


H 


H 


- * .. 

Six months to 30th June 

1988 

1987 

Change 

• ' 1- -■ 1, 

Turnover 

£74.9m 

£68. 3m 

+10% 

_ 

Profit before caxacioo 

£6.0m 

£5.0m 

+20% 

‘ " :* .. c 

Earnings per share 


: 7.7p 

+19.5% 

- ■ ( *-■ 

Interim dividend per share 

2.65p 

2.4p 

+10.4% 





* GEFsbusmess continues redevelop well: its strong financial position and 
most satisfactory cash flow prorofe a springboard for major nranapn . 

* CEI has agreed to acquire two U.S. electronic component businesses 
which will provide CEI with a significant manufacturing base and 
distribution network in the U.S. as well as a substantial extension to 
its product range. 

* CEI is also currently in discussions for the acquisition of a further two 
electronic component businesses based - in continental Europe. 

* Both the U.S. acquisition and the proposed European acquisitions 
represent important steps in CETs international strategy of 
strengthening its marketing and manufiuxuring facilities in die larger 
markets erf the world. 


Copies of the Interim Report and of the 1987 Anmtal Report an 
available from the Secretary, Cambridge Electronic Industries pic. 
Botanic House, 100 Hills Road, Cambridge CB2 1LQ , 


— — ‘ fa hwiil to rnifl—n irlti tfi rnnliinit fnr ’ 

Application has been made to the Council of The Stock Eachany for the Ordinary Shares of 50p 
each in Wff Gnnp pic now in issue and propo a e d to be issued porsoant to the R^hti Issue to be 
admitted to the Official Lite. This advertisement appears a* a matter of record only and does not 
con sti tute an invitation to the public to anbacribe for shares. 


A 


GROUP 

pin 

{Incorporated I* England under the Companies Act 1929 Registered No. 358466) 
Introduction to the Official list 
Sponsored by SBCI Savory Mflln limited 
and 

Proposed Rights Issne of 2,435.826 new Ordinary Shares of 5Qp each at 1 SQp per share 


Share Capital following proposed Rights Isme 


Au th o ri sed 


£6,250,000 


h Ordinaiy Shares of 50p each 


Issued and • 
proposed to be 
issued fhllypaid 
£4,871,651 


EBC Onwp pie is the hoMin* company for a troop oT companiea engaged in exmatraction and 
property devdopraent operetina mainly in the Wear Country in an area bounded by a line to the 
Cast drawn between CBoucerter and Portsmooth- 

Details relating to T RUC Group pk: are amiable in the new issne cards circulaied by the statistical 
•ervioca of End Financial limited, listing Pvticatass have been published and copies may be 
obtained for personal ooOectioa from the Company Announcements Office, The Stock Exchange, 
46 Fmsbtay Square, i ffwdmn EC2A 1DD for two days fina the date of tins notice and during 
ponnal hutinewhouia on say weekday (Saturdays and pubBchotidaya excepted) up to and i n c l u din g 
7th October, 19*8 from: 


SM3 Savvy MBs 


EBC Group pic 


130 HM Street. 
IEC2V6AQ. 


63 St. DavU*a HIB, 
EntvEX44DW. 


PLC, 

Ba gl t t m r a P ap - fret 

PX). Box 83, 
CaBf n av e . 
RedcUflc Way, 

*7YA 


24th 


ponce of issue abmugeo particulars 

ThiM advertisement is Issued in compliance with the requirements of the Council of The Slock 
undermentioned Stock to be admitted to the Official List. 


The Bristol Waterworks 
Company 

(incorporated in England on 16th July 1846 by Tt» Bristol Waterworks Company Act, 1846) 

OFFER FOR SALE BY TENDER 

on behalf of 

THE BRISTOL WATERWORKS COMPANY 

■by 

SEYMOUR PIERCE BUTTERFIELD LTD. 

of 

£1,846,153 4-9 per cent. Ordinary Stock 

(orauchleaawainountmStockBawn.writhpnniiufttAralwaniaxhQuinofGBmilHon) 

Minimum Price of issue £325 per £100 of Stock 

T ° ,a, » 



TMmn tor 1 Ordinary Stock rM b« 

Popartmvit.'RO. taa » ggP" ***"*• Shad, 

thanffajiucw WodnoodafraiWtAUfliu*^ 1 **^^^- 

^ forcoaactlorMmhft. <tartn g | °* *^* x ^ n *“ bow today 

.^.1 TIU AllOUSt. tMC ffOOrt" 


imipaUrt Augoat,tMt from;— 

S^RKHirneicalMiJ^WUd.. 

W, OW dowry; Loodoo.KJaOBEA- 

NatlonM Westminster Sank PIC, 




UK COMPANY NEWS 


Cambridge Electronic rises to £6m 
despite components side shortfall 


By Andrew Hill 


CAMBRIDGE ELECTRONIC 
Industries, which yesterday 
announced the purchase of two 
US electronic components busi- 
nesses from its former parent 
company Philips, also reported 
pre-tax profits up 19 per cent to 
£&0lm in the six months to 
June 30. Group turnover rose 
10 per cent to £74L9m. 

Sales at the taterconnection 
technology division Increased 
by 9 per cent to £23.4m 
(£21 .5m). The division’s trading 
profits grew 42 per cent to 
£?..2Sm (£LS9m), with Bepi Cir- 
cuits returning to profitability. 

However, the electronic com- 
ponents division suffered a set- 
back in trading profits, which 
feH from £L48m to £979,000 on 
sales of £lR.lm (£L7^m). 


CEI said this was caused by 
the short-term difficulty of 
recruiting and retaining per- 
sonnel at the Hinchley trans- 
former and power supply sub- 
sidiary, based at Devizes, 
Wiltshire, arid an unexpected 
surge in orders from important 
Japanese customers. Belling 
Lee, circuit protector and filter 
manufacturer, had a disap- 
pointing start to the year. 


£l-57m (£ 1.03m) on turnover of 
£16.&n (£l!L2m). 

Earnings per share advanced 
U5p to 9.2p and CEI declared 
hn interim dividend of 2.65p 
(2.4p).The shares fell I4p to 
246p. 


• COMMENT 


Defence and instrumentation 
profits rose to £L37m (£L28m) 
on sales of £l&6m (£16.4m), and 
the group said it hoped to be 
awarded a £10m instrumenta- 
tion contract in North America 
within the Tn»gt three months. 


Specialist companies pushed 
.up profits by 53 per cent to 


Analysts seem dnbious about 
CETs ability to pep up the new 
US businesses. The acquisi- 
tions will probably not dilute 
earnings, and they certainly 
broaden CEI’s geographic 
spread, but the question is 
whether the companies are 
capable of growth now they are 
free of the Philips fetters. 
Profit margins at the two com- 


panies have been declining for 
the last five years, and the UK 
group has said it is unlikely to 
replace existing management 
Nervous observers also recall 
the history of CETs one previ- 
ous US acquisition, Elec-Trol, 
bought in 1982, which returned 
to profit in 1987 after two years 
in the red. These worries were' 
compounded yesterday by dis- 
appointment about Hincbley’s- 
losses. blamed on the turbulent 
Devizes labour market That 
said, the other subsidiaries per- 
formed creditably and the com- 
pany is moving forward, after a 
few years of painful rationalis- 
ation. If full-year profits 
approach ElGm, the shares look 
fairly valued on a prospective 
p/e of just over 10. 


Holmes & Marchant acquires Catalyst 


By Philip Coggan 


HOLMES & MARCHANT 
Group, marketing services 
company, yesterday announced 
a recommended £12.9m offer 
far Catalyst Communications, 
sales promotion and design 
gro u p, which recently moved 
from the Third Market to the 
USM. 

Irrevocable acceptances have 
been received from holders of 
4S.8 per cent of Catalyst's 
equity. Holmes acquired BJt per 
cent of Catalyst’s shares yes- 
terday, bringing its stake, 
inclnffiiig acceptances, to a lit- 
tle more than 50 per cent. 

Yesterday, Catalyst 


announced pre-tax profits for 
the six months to June 30, of 
£583,000 a tiny increase on the 
£579,000 in the first half of last 
year. While turnover increased 
just 3.3 per cent to £7.69m 
(£7, 44m), administration 
expenses rose by 30.7 per cent 
to £2.56m (£1.96m). Earnings 
per share fell 16 per cent to 

2-lp (2J>p). 

Analysts estimated that the 
result was likely to dilute 
Holmes’ paming ft per shar e by 
about 15 per cent in the next 
financial year. 

Catalyst said that one sales 
promotion company. Alternate 


Resources, was affected by 
adverse exchange rates and a 
build-up in casts, resulting in a 
first-half loss. New manage- 
ment hag been tngtwtieH anil 
the company was operating 
profitably. 

When the offer becomes 
unconditional, Mr Tim Rosen, 
chairman and Mr Leslie Kent, 
managing director, of Catalyst 
will resign. 

Holmes is offering one of its 
ordinary shares for every four 
in Catalyst On the basis of last 
night’s closing Holmes share 
price of 247p, down I8p, the 
offer values each Catalyst 


-share at about 62p. Catalyst’s 
shares closed up 6p at 58p. 

The move is the latest in a 
series of acquisitions by 
Holmes since it joined the 
stock market three years ago. 
Last month the company paid 
£3m for Broadbent, Londori- 
based advertising agency. 

Catalyst has also been active 
in the acquisitions field since it 
became one of the first compa- 
nies on the Third Market in 
January 1987. Particularly it 
built up its sales promotion 
activities which accounted for 
about 60 per cent of profits last 
year. 


Halfway 
losses at 
Olives 
Paper Mill 


By Philip Coggan 

OLIVES PAPER Mill, paper 
and property company, yester- 
day announced an interim pre- 
tax loss of £31,600. compared 
with a profit of £115,000 at the 
same stage last year. 

As at the previous foil year, 
exceptional items, principally 
compensation paid to former 
directors, pulled the company 
into the red, despite the fact 
that the group made a profit at 
the operating level. 

Management' control of the 
company changed in Septem- 
ber last year when sharehold- 
ers approved a proposal for Mr 
Michael Kent, a property devel- 
oper, to inject £3_74m into the 
group. Since taking control, Mr 
Kent has revamped the board 
and has acquired Kent City 
Developments, a private prop- 
erty company owned by him- 
self. 

In his statement yesterday, 
Mr Kent said that the results 
reflected the cost of refurbish- 
ment work and modernisation 
of plant and machinery. Oper- 
ating profit was £87,000 
(£202,000) on turnover of 
£4.96m (£4. 68m). Interest 
receivable was £83,000 (£87,000 
payable) but there was an 
exceptional debit of £202,000, 
reflecting redundancy costs of 
£82,000 and directors’ compen- 
sation Of £120,000. 

The statement said that Kent 
City Developments had made 
forward property sales of some 
£6m, which would make a con- 
tribution of not less than £1.7m 
to profits during the current 
financial year. “1 am confident 
that the group will achieve a 
very satisfactory level of profit 
for the year as a whale” said 
Mr Kent, who also expected, 
subject to no unforseen cir- 
cumstances, a return to the 
dividend list. 

Olives’ shares closed 
unchanged at 175p. 


T&N raises 
£7m through 
disposals 


T&N, engineering group, has 
raised £7m through two dispos- 
als that mark final stage of 
its retreat from the European 
fibre cement market, writes 
Clare Pearson. 

The company has sold to 
Compagnie Einandere Etemit 
of Belgium its 49 per cent stake 
in the Irish Tegral group, as 
well as its residual 49 per cent 
holding in Etemit’s own UK 
subsidiary. Etemit acquired 51 
per cent of this company, Eter- 
nic TAC, from T&N two y ea rs 
ago. 

These moves are in line with 
a String Of small rNc prrealc of 
non-core businesses recently 
made by T&N. 


Channel Tnnnel Inv 

Shares in Channel Tunnel 
Investments, one of the more 
eccentric companies on the 
Stock Exchange, yesterday 
gained Up to I30p, on news that 
Mr Henry Moszkowicz has 
acquired a farther 4^300 shares, 
taking his stake to 90,500 
shares or 6J7 per cent 


The company was founded in 
2881 to develop a Channel Tun- 
nel but is in no way connected 
with the Eurotunnel project. 


\ 


KLP widens its UK activities 


By Clare Pearson 


KLP, sales promotion 
consultancy, has bought a 
group of London-based market- 
ing services companies for 
£1.5m. The deal marks KLFs 
, eighth acquisition in its cur- 
rent finanrial year. 

The purchase of Osborne, 
the holding company for the 
group, widens KLFs activities 
in the UK into the fields of 
advertising, market research 
and public relations. 

It follows a major expansion 


of KLFs US operations two 
months ago, when it 
announced it was buying 
Metro Sellger Industries, a 
direct-marketing agency, and 
Field Research Corporation, a 
market research concern, for a 
combined maximum of $25.6m 

( £15 2m) 

Mr Colin Lloyd, chief exeeu- 
. tive. said KLP did not intend to 
make a push into mainstream 
advertising, but Osborne’s 
strength in response-led tech- 


Ratcliffs shares excited 
by Bromsgrove holding 


By Nikki Tait 


SHARES IN Ratcliffs (Great 
Bridge), brass and copper strip 
manufacturer, jumped 15p to 
143p yesterday on news that 
Bromsgrove Industries, Bir- 
mingham-based specialist engi- 
neering group, had acquired 
544,000 shares, or 11.62 per 
cent. 

According to Ratcliffs, the 
bulk of the stake was bought 
from Arbuthnot Latham, mer- 
chant bank, which in turn 
acquired it from Ley land 
Growth last month. 

The Bromsgrove holding was 
bought at 125 3 4p a share. 

Yesterday, Ratcliffs pointed 
to the fact that NZI Corpora- 
tion, New Zealand-based finan- 
cial serivees group which is 
being acquired by General 
Accident, UK composite 
insurer, appeared to be associ- 
ated with all three companies. 

NZI acquired Arbuthnot 
Latham earlier this year, and 


in jane announced that it held 
12.15 per cent of Bromsgrove. 

The GA offer for NZI follows 
the auction of a 38 per cent 
stake held by Sir Ron Brier- 
ley’s Brierley Investments. 
BrierLey, meanwhile, still has a 
direct interest in Ratcliffs: the 
stake, held through Industrial 
Equity (Pacific) stands at 
about 8J5 per cent 

Bromsgrove, where no direc- 
tors were available to comment 
yesterday afternoon, has an 
acquisitive reputation, 
although it recently sold on a 
small stake in Banro Industries 
to Wagon Industrial Holdings; 
when the latter emerged as a 
bidder. 

Ratcliffs, which fell into the 
red in 1986, recovered to a 
£425,000 profit last year. 

The Ratcliff family speaks 
for 54 per cent of the compa- 
ny’s shares. 


niques would fit in with the 
requirements particularly of 
KLFs financial services cus- 
tomers. 

The consideration is being 
satisfied mainly in cash, but 
jdso involves the issue of 79,884 
new shares. 

Osborne incurred a pre-tax 
loss of £554,000 in the year to 
end-June 1987, which Mr Lloyd 
said was due to a number of 
non-recurring factors. The 
company has warranted an' 
operating profit of £356,000 for 
the year to end-June 1988. Its 
operating companies include 
Lonsdale Research, Lonsdale 
Advertising, and Studio on the 
Square. 

Mr Lloyd said that after pay- 
ing for Osborne, KLP would 
have about £3m left from the 
proceeds of a £9m call on 
shareholders in June, and an 
£8m earlier rights issue. 


CAISSE CENTRALE DE 


COOPERATION 
ECONOMIQUE (C.C.C.E) 
ECU 200.000.000 Floating 


Rate Notes doe 2006 
and 200.000 w a rr a nts to 
•ubserfoe up to ECU 


200.0004)00 


7,50% Guaranteed Notes due 
2006 


Far tho period August 24,1088 la 
N n wmBar 34.1088 ttM MMs wUI carry 
an MaroK rale of 7JJ% par annum 
wttn an interns amount of EOJ IMJX 
par ECU 10.000 now and of ECU 
1-B40J3 par ECU 100.000 note. 


The r ei nv en t t n i an taf pa yment date wdl 
ba Hovonwar 24. ions. 


Sanqua Partau (Luxembourg) SLA. 
Agent Bank 


nsdol 330.000.000 
Second series floating 
enro-dollar rep a ckaged 
assets of 

The Republic of Italy 
dne 1994 
(Le.ra.r.1 n) 


For the period August 24, 
1988 to November 25, 
1988 the notes will carry 
an interest rate of 8 % 

per annum with an interest 
amount of usdol 2308,85 
per usdol 100.000 note. 


The relevant interest 
payment date will be 
November 25, 1988. 


Banqoe Paribas 
(Laxemboarg) S.A. 
Agent Bank 


Dresdner Finance B.V. 

Amsterdam 


DM 500,000,000 
Floating Rate Notes 1985/1990 


Tha Rate oMntercat appteab la to ttic 
Interne Ported from August 24. 1B88 to 
November 23. 1938. Indus to!* was 
determined By Barclays Bank PLC. London, 
as Reference Agont to t>e 5*k par cant 
Per annum. Tlwrafora, on Novombw 34, 


1988. tee relevant Interest Rayment Date. 

Interest par Note of DM 1O0W pdndpsl 

amount in the amount of DM 137.36 
and interest per Note of DM 250,000 in 
Ute amount of- DM 3^34.03 is due. 


Frankfurt am Main, 
in August 1988 


Dresdner Bank 

AJOiengasdtectiafl 

Princtpd Paying Agent 


Dresdner Sank Grou> 


lO 


HRGMin 
expansion 
of US 
network 


By Nick Bunker 


HOGG ROBINSON & Gardner 
Mountain, the London-based 
insurance broking group, is 
extending the US network of 
its North American subsidiary. 
Republic Hogg Robinson, with 
two small purchases In Michi- 
gan and Massachusetts. 

The first deal, the acquisi- 
tion of Phoenix Agency, an 
independent insurance agent 
based in Saginaw, Michigan, Is 
part of HRGM’s strategy of 
w pandiwg its US branch out- 
lets by buying small to medi- 
um-sized agency businesses at 
a time when many indepen- 
dent agents are feeling the 
need for backing from larger 
groups. 

HRGM said it was paying an 
initial 6850.000 (£500,000) for 
Phoenix with a further 
$450,000 payable between now 
and 1992 depending on profits. 
Phoenix’s 1988 pro-forma pre- 
tax profits are $290,000. 

The second deal is more 
unusual and involves HRGM 
moving from 40 per cent to 55 
per cent control of Hokanson- 
Anderson, a Marshfield, Mas- 
sachusetts-based company 
which runs a specialist insur- 
ance administration business 
called Group Insurance Ser- 
vice Center. 


It manages in-house health 
insurance schemes for US com- 
panies and has dose business 
ties with HRGM, through 
which it arranges excess medi- 
cal Insurance coverage at 
Lloyd’s of London and with US 
insurers. 


HRGM said tt will pay an 
initial $125,000 for the extra 
shares, with a deferred pay- 
ment of $525,000 over six 
years. Hokanson-Anderson’s 
pro forma pre-tax profits are 
$500,000. 


Ansbacher boy 

Henry Ansbacher Holdings, 
merchant banking group, has 
added a fourth offshore bank- 
ing subsidiary to its network 
of outlets in the world’s tax 
havens. 

It has bought 75 per cent of 
Guinness Mahon Cayman 
Trust, a Grand Cayman-based 
licensed bank and trust for 
£3m satisfied by £750,000 cash 
and £2L25m in shares. 


The Grand Cayman opera- 
tion was sold to its manage- 
ment by the Guinness Mahon 
group in June, after a year in 
which it suffered an excep- 
tional loss of £1.04m on the 
sale of an investment. 


GRANVILLE 


SPONSORED SECURITIES 







Gross 

Yield 


Hiflb 

low 

Qmmv 

Price 

Change 

dhr <p) 

% 

P/E 

237 

185 

Ass. BriL Ind. Ordinary 

237 

+1 

8.7 

3.7 

a9 

237 

186 

Ass.0rlLlwl.CULS 

237 

+1 

10A 

42 


40 

25 

Amitage and Rhodes . .. 

37 

0 

- 

- 

- 

57 

38 

BBB Design group (USM) 

38 

-1 

2J 

5.4 

6.1 

1M 

155 

Bardon Group — _ — 

169 

0 

3-3 

ZO 

23.9 

115 

100 

Baidoti Group Corn. Pref. 

115 

0 

6.7 

53 

- 

148 

135 

Bray Technologies 

135 

0 

52 

3.9 

102 

114 

100 

Bmnhlll Cam. Pref 

113 

0 

IIP 

9.7 

- 

287 

246 

CCL Group Ordinary 

287 

0 

123 

45 

43 

161 

124 

OX Group 11 % Conv. Pref 

161*4 

■*1 

14.7 

VJ 


151 

129 

Carta PIcGD 

150 

0 

(U 

4J 

92 

112 

100 

Carta 73% Pref C5B ...._ - 

noxd 

0 

103 

9.4 


305 

147 

George Blair — 

305 

0 

3.7 

12 

8.4 

% 

60 

bb Group — 

96 

+1 




118 

87 

Jadson Group tSD — — 

114 xd 

0 

3.4 

3.0 

12.6 

350 

245 

Multi house NY (AostSB 

345 

0 

- 

- 

- 

111 

40 

Robert Jenkins 

lllxd 

0 

75 


2.4 

430 

124 

SeruttOBS 

415 

0 

8.0 

1.9 

37.7 

233 

194 

TonJay & Carlisle — — — — 

233sus 

0 

7.7 

33 

7.7 

% 

56 

Trevlaa Holdings (USM) 

BUd 

+1 

2.7 

3.4 

8.7 

113 

100 

Unlstnit Europe Con* Pref 

no 

0 

8.0 

73 


295 

203 

W.S rentes..- 

295 

0 

162 

55 

7.9 

Securities designated SO a at fUSM) are dealt in subject to 

the rales and regulations of The 


Exchange. Other securities llsud show are dealt la subject to the rules of T5A 


These Securities are dealt In strlaly on a matched bargain bash. Neither Grenville & Co hor 
Granville Davies Ltd are market makers In these securities 


Granule & Co. Hd. 

8 Loral Lane. Loodoa EC3K.B8P 
Telephone 01-621 1212 

Member of TSA 


GmviHe Davies »<««>««■< 
K Low Lane, Lond o n EC3R UP 
Telephone 01-621 1212 
Member of the Slock Exch ange &. TSA 


This Advertisement is issued in 
requirements at the Council of The 


with the 
Exchange. 


The Bristol 
Waterworks Company 


(Incorporated in England) 

Placing of 6,000,000 
6 per cont C onv art lb le Re cteo mnb le Preferen ce 
Shares, 1998 at El per shsre. 


for the above Shares to be admitted to the Official UsL 
Preference Shares wifl rank for ffividendspa/f passu with the existing 
preferencoc^ritalof the Company and In priority to the ordinary 
capital of the Company 


In accordance with the requir em e n ts of The CouncO of The 
Stock Exchange, market makers have be 


i have b e en o f fered partidpe Ho n 
In the marketing of the Shares. 

Particulars of the Shares have bean circulated in the Extol 
Statistical Services Lttt, and copies will be available, for collection 
onix during usual business hours until ath August. 1988 from the 
Company Announcements Office of The International Stock 
Exchange. 46-50 Finsbury Square, London EC2. Copies may also 
be obtained during norma business hows up to and including 31 st 
August, 1888, from 


Mail Marketing (Bristol) Ltd., 

Springfield House, Princess Street, 
Bedmlneter, Bristol BS3 4EF 
or Seymour Pierce Butterfield Ltd., 

10 Old Jewry, 

London EC2R 8EA 
or horn the Company's principal office, 

P.O. Box 218. Bridgwater Road, 

SttofBSSMO. 24th AuguO, 1888 










...... . . . . ._ . ... • ' • ■ " 


22 


FWANCUL TIMES WEDNESDAY AUGUST » I«S 


UK COMPANY NEWS 


NEI ups interim payment 
as profits exceed £ 18 m 


By Cfare Pearson 

NORTHERN ENGINEERING 
Industries yesterday said it' 
would increase its dividend for 
the first time in five years. The 
company, which this year 
emerged from a lengthy pro- 
cess of rationalisation during 
which it shed 6,000 employees, 
is lifting the interim dividend 
modestly to i_8p (L65p). 

The ann ouncement came at 

the same time as the power 
station and materials handling 
supplier reported a 30 per cent 
advance in pre-tax profits to 
£16.5m in the six months to 
end-June. 

Mr Terry Harrison, chair- 
man, said he was “most heart- 
ened'' by the fact that, unlike 
previous years, the company's 
running rate of order intake 
was exceeding its output Dur- 
ing the first half, order intake 
at £420m was up 13 per cent. 

He added that he believed 
the first-half improvement in 
pre-tax margins from 3.7 to 5.7 
per cent was sustainable. Turn- 
over was down to £325.4m from 
£385.4m, reflecting lower major 
contract completions. 

NEI was this month beaten 
by GEC. its rival on the tur- 


bine side, in the bidding for a 
£90m turbine generator con- 
tract for the Fawley coal-fired 
power station, the first of three 
new stations planned in the 
UK. 

However, it also recently 
defeated rival FKI Babcock to 
obtain the design contract - 
from which the manufacturing 
contract follows, subject to 
planning permission - for two 
boilers for Fawley, and will 
tender for similar contracts for 
the other two stations next 
month. 

Mr Harrison said possible 
joint ventures with similar 
international companies were 
being kept under review fol- 
lowing the recent deal through 
which Combustion Engineer- 
ing of the US took a 35 per cent 
stake in NEI's boiler subsid- 
iary. 

On the electrical engineering 
side, NEI recently strength- 
ened its links with Mitsubishi 
Electric with a deal allowing it 
to manufacture under licence 
circuit breakers designed by 
the Japanese company. 

The materials handling side 
was seeing a high level of 


Federated Housing rises 65% 


The continuing buoyant 
housing market helped Feder- 
ated Housing, residential prop- 
erty developer, record a 65 per 
cent expansion in pre-tax prof- 
its in the first half of the year. 

The outcome. £2. 82m against 
£1.71m. was achieved on turn- 
over up from £12. 56m to 
£15. 76m. Mr Peter Meyer, chair- 


man, said me average sale 
price of the group’s properties 
was about £70,000. and despite 
the steep rise in interest rates 
in the past two months, he saw 
no sign of a slackening in 
demand for mortgages. 

The interim dividend Is lifted 
to 2.5p (1.7p), payable from 
earnings of 18-lp (lOJp) per 5p 
share. 


activity, Mr Harrison said. The 
design contract for equipment 
to lift submarines out of the 
water at Scotland’s Fas lane dry 
dock had provided plenty of 
work during the first half, and 
the £50m construction contract 
had come through since the 
period end. 

Tax. took £7.4m (£5.7m). 
Earnings per share rose to 
3.73p (2.74p). 

• COMMENT 

These results provided plenty 
of encouragement for investors 
in NEI, whose shares edged up 
yesterday against the back- 
ground of a falling market. 
‘‘Masochistic'' is Mr Harrison's 
word for the power plant busi- 
ness; however, the 1990‘s are 
expected to see a reversal in its 
20-year decline as old plant 
needs to be replaced, and as 
smaller stations proliferate 
under the impact of electricity 
privatisation. Since it has com- 
pleted its rationalisations just 
as orders pick up, NEI looks 
quite well-placed. Neverthe- 
less, it still needs to engage In 
more joint ventures to avoid 
one of the bigger international 
players making a bid' for it: 
hence the deal with Combus- 
tion Engineering on the boiler 
side. A similar deal is needed 
on the turbine generator side, 
although profitable replace- 
ment orders will provide 
enough work for this division 
till the end of next year. NEI 
should make about £41m pre- 
tax this year: the shares, on a 
prospective p/e of nearly 12, 
are sustained by the income 
stream and could epjoy bid 
Speculation as welL 


COMPANY NEWS IN BRIEF 


CAMBRIAN & GENERAL 
Securities: Net asset value per 
ordinary share on July 31 1988 
was 142.01p. Capital shares 
stood at 199.57p. 

ENGLISH & SCOTTISH Inves- 
tors: Net asset value per 25p 
share stood at 133.9p at July 31 
1988 (161.6p at end-July 1987 
and 120.6p at January 31 1988). 
Available income for half year 
to July 31 £1.34m (£768,000). 
Basic earnings 1.66p (0.94p) and 
interim dividend 0.65p (0.55p). 
EVERED HOLDINGS has com- 
pleted its acquisition of Fidler 
following approval at an emer- 
gency general meeting. 

FROST GROUP: Turnover 
£25.43m (£l6-89m) and pre-tax 
profits £L44m (El.Olm) for six 
months to June 30. Interim div- 
idend 4p (3p) payable from 
earnings per share of 7.8p 


(5.66p). Chairman expects fur- 
ther progress in second half. 

D C GARDNER GROUP: Of the 
open offer of 1.53m new ordi- 
nary shares in the company 
made on August 1 1988 in con- 
nection with the acquisition of 
Chart Foulks Lynch, valid 
applications have been 
received in respect of 528,683 
and a further 704,035 have been 
placed firm. 

GOLD & BASE Metal Mine, 
investment holding company, 
has reported net assets at the 
end of the six months to June 
30 of 15.49p (18p). Pre-tax prefit 
rose from £31,200 to £44,700. 
This was achieved on revenue 
of £116.000 (£60,000). Earnings 
remained at 0.32p. 

LONDON & EDINBURGH 
Trust subsidiary, 245 Hammer- 
smith Road Investments, has 


issued £35.5m of 6.625% 
secured loan notes due 19%, 
listed on the Luxembourg 
exchange. 

LONDON AND ST LAWRENCE 
Investment Company is to pay 
an interim dividend for the 
year to the end of August 1988 
of L56p (l.46p) and a special 
dividend of 0.6p (nil). 
TURRIFF CORPORATION, 
whose interests include build- 
ing construction, maintenance 
services and plant hire, has 
acquired Freeway Plant Sales 
Limited, a company engaged in 
the sale and hire of contrac- 
tors’ plant, for an initial cash 
consideration of £600,000. A 
further payment may be pay- 
able in May 1992 based on Free- 
way’s average profits in the 
three years to December 31 
1991- 


CHANNEL 

ISLANDS 

The Financial Times proposes to publish a Survey on the above on 

Thursday, 15th December 1988 

For a full editorial synopsis and advertisement details, please contact: 

Brian Heron 

on 061 834 9381 (telex 666813) 

(fax 061 832 9248) 
or write to him at: 

Financial Times, Alexandra BcuMings 
Queen Street, Manchester M2 5HT. 


FINANCIAL TIMES 

l UP 0*1 i ai/ilNllSNlWiPArf* 


\ 


UK BANKING 


The Financial Times proposes to publish a Survey on the 

above on 

26TH SEPTEMBER 1988 

For a full editorial synopsis and advertisement details, please 

contact: 

DAVID REED 

on 01-248-8000 ext 3461 
or write to him at: 


Bracken House, 10 Cannon Street 
London EC4P 4BY. 


FINANCIAL TIMES 

tUIOH'I BUSIN! Si Ntwsurt* 


OFT owns 
up to error 
over P&O 
reference 

By Nikki Tait 

RED FACES and. a good deal of 
puzzlement developed yester- 
day morning after a surprise 
announcement that the 9210m 
(£I25m) acquisition by Penin- 
sular & Oriental, shipping and 
property gronp, of Sitmar 
Cruises was being referred to 
the Monopolies and Mergers 
Commission. 

The error was speedily recti- 
fied with the Office of Fair 
Trading apologising for the 
error. The corrected statement 
said that the Trade Secretary 
“has derided not to refer” the 
deal- The previous statement 
omitted the “not” and yester- 
day the OFT said the mistake 
had come in the telex sent to 
the Stock Exchange. 

The Stock Exchange said 
that only a handful of deals 
had taken place between the 
issue of the two statements 
and that, after talking to par- 
ties involved. It did not believe 
that It would be necessary to 
unscramble those trades. The 
OFT, meanwhile, is consider- 
ing rephrasing referral state- 
ments. so that such an error - 
which a spokesman could not 
recall happening in the past - 
is not repeated. 


Southwest Resources 

Southwest Resources, a 
USM-quoted oil and gas com- 
pany, yesterday announced the 
discovery of a new field in Gal- 
veston County, Texas, with 
total estimated reserves of up 
to 10m barrels of oil equiva- 
lent 

Dominion International, a 
financial services company, 
recently reduced its stake in 
Southwest from 43 per cent to 
31 per cent Southwest shares 
were unchanged at 17I2P yes- 
terday. 


EBC rises 43% and 
calls for £3.4m 


EBC Group. USM-quoted 
housebuilder and property 
developer, announce d a 43 per 
cent rise in pre-tax profits to 
£1^5m against £949,000 for the 
six months to June 30. The 
group is also r?n* n g for about 
£3.4m in a on e-for- three rights 
issue and intends to apply for a 
full listing . 

The interim dividend is lifted 
to 3.6p (2JJ2p adjusted) payable 
from improved earn Logs or 
l2.03p (&44p) per 50p share. ' 


Looking ahead, Mr David 
Stoneman, chairman, said the 
group’s prospects for the bal- 
ance of the year were good. He 
was paoticulariy encouraged by 
exportations of further success 
in housing and development 
and from the building compa- 
nies. 

He added that the rights 
issue, of 2.44m new ordinary 
shares at I50p each, would 
reduce borrowings and provide 
capital for expansion. 


Ex-Lands falls sharply 
and cautions on outlook 


EX-LANDS, investment 
holding company, saw its prof- 
its fall from £121,000 to £10.100 
in the half year to end-June; 
The directors said generally 
uncertain conditions ana 
reduced interest and volumes 
in the market had created diffi- 
culties for its share-dealing 
subsidiary. 

They added that If the com- 
pany was to achieve earnings 


to cover the 0-9p dividend paid 
for 1987 conditions would need 
to become a good deal more 
profitable in the second half. 

It was pointed out that this 
had not been the case since the 
b anning of the period and if 
anything, there was “an 
increased air of caution.” A 
dividend payment would be 
considered in the light of 1988 

ffaptfng it. 


Life Sciences sharply up 

LIFE SCIENCES International, 
scientific instruments maker 
which changed zts name from 
Phicom in May, has achieved 
strong growth in sales and 
profits in the six months to 
June 30 1988. 

The taxable result advanced 
from £650,000 to SZJSm on turn- 
over up sharply from £7.78mto 
£19.62m. The directors are rais- 
ing the interim dividend by 67 
per cent to 0.5p (0-3p) on earn- 
ings per lOp share of 1.8p 
(0.7p). 

Mr Christopher Bland, chair- 
man, said Forma Scientific had 
made a very good start since 
joining the group, Shandon Sci- 


entific had performed satisfac- 
torily and IRS sales were 
encouraging. Whale Scientific 
and E-C Apparatus, acquired at 
the end of the period under 
review, would contribute to 
second-half results. 

CIS cots losses 

After six months of 
rationalisation and reorganisa- 
tion OXS Group emerged with 
pre-tax losses reduced from 
£186,000 to £45)000 for the first 
half of 1988. Turnover of this 
USM-quoted inspection and 
tasting services group rose 16 
per cent from £4J9m to £5.68m. 


NOTICE TO HOUJJERS of WARRA.VTS 

m 

lHIPBN CO*PO**TIO» 

U.s. $ 30 , 000,000 


Asahipen Corporation 

Put 

tha marine* of 

(tha "Company") teW on 6tfi psmcutao of 

an 


Dated: August 24th. 1968 


IKK SUMITOMO BANK, LUwnTKft 
as Prinbpftl *8™* 
farandonfariuilf<>( 

ASAIOTEN CORPORATION 



The holding company fer a group o* eonxwwajwaagoa 
in construction and property development, manly the 
West Country. 

GROUP Unawfoodrest^ fwtto six nxwtfw ending: 

pic 30 June 1M» 30 June 18*7 

External turnover E2S.60M00 £26.2! 1.000 

Profit before tax £1.353,000 £949,000 

Earnings per share 12-°3p S 44p 

DMdond per sham 3*®P 2 22v 

The Gnxtf'BprDspecBOTwdtii^wBh good 

indicaiions tor thebatanceol the current year. c-Wmwi 

ol bosoms) by tha issua byway of right* of 2A3S, SSfi raw “timaryslwwwtWl) 

M VBt«9adcn»ne«.oq^r^lorBwnf*^ B,l ^ ortl ™^5^^ ^ 
dbus«»s»on9S«p«inhBri9eaThecktatoKtores«dlMh#«hoW8rsjfiiod?3Aris j si *9S& 
whttawprfSMlnnBfHfttaaniid^toEBCGra* 
toraonanyianfcdarlStfurc^ajripubfctoWcysottap^ 

1888 tram 

Cen0mfSteutmy. 

SC Group pt. M»wfhhu^S3S»n»wftr W Ewl»r£X440iV. 

Taieptwe (0382) 52273. {FmzMdw (<092)41 125$ 



These days, when looking at our profits, you should regard us 
as a strong property development and housing group with 
excellent engineering and construction capabilities . 

The interim results we announced yesterday reflect this. 

Interim Results 

(unaudited) 

6 months ended 30th June 

1988 1987 


Turnover 


£m 

551.1 


£m 

392.0 


UP 41% 





Profit 

34.0 



before tax 

21.2 

UP 60% 

Earnings 
per share 

13.7p 

8.7p 

UP 57% 

Dividend . 

3.0p 

2.5p 

UP 20% 


TAYLOR 

WOODROW 


FOR A COPY OF OUR INTERIM STATEMENT, PLEASE WRITE TO THE COMPANY SECRETARY TAYLOR WOODROW pic, 10 BARK STREET LONDON Wivann ‘ 
This advertisement has been approved by Touche Ross & Co. who i are regulated by the Institute of Chartered Accountants in Enriawi and 

Past performance is not necessarily an indication of future performance. ‘ ana Wales. 











23 


FINANCIAL TTMBS WEDNESDAY AUGUST 24*1988; 


CURRENCIES, MONEY AND CAPITAL MARKETS 


FOREIGN EXCHANGES 


Central banks subdue dollar 


CENTRAL BANK Intervention 
gained the upper band in cur- 
rency marke t s yesterday. The 
US Federal Reserve Board 
Joined several European hmiw 
in selling dollars, and this dis- 
couraged investors from open- 
ing fresh positions. 

Nevertheless, the US unit 
retained a fairly bullish under- 
tone, and sentiment was little 
affected by a 0.4 p.c, rise in US 
consumer prices in July - in 
line with expectations - or a 7.0 
p.c. decline in US durable 
goods orders in July. 

However, the dollar 
on a softer note at DML9065 
from DM 1.9 190 and Y13&40 
compared with Y134L05. Else- 
where it finished at SFrU3055 
from SFri.6115 and FFr6.4675 
from FFr6,5050. On Bank of 
England figures, the dollar’s 
exchange rate index Ml from 
100.4 to 1001 

Sterling finishe d unchanged 
on the day, improving from a 
weaker start, but relinquishing 
its gains during the afternoon. 
The pound opened on a quiet 
note, with investors reluctant 
to hold aftrHwg positions ahead 
of the release of UK July trade 
figures tomorrow. However 
this pushed sterling down to a 
low of DM3.1975 against the 
D-Mark, which many traders 
saw as an op p or t uni ty far the 
Bank of England to increase 
interest rates. 

This spurred fresh demand 
for the pound, taking it to the 

£ IN NEW YORK 


day's highs. But there was no 
message. on rates from the 
authorities, and the pound sub- 
sequently fan away to finish 
unchang ed from us slightly 
softer opening. 

On Bank of Rw gtawd figures, ' 
the pound's exchange rate 
index dosed at 76.1, down from 
a high of 763 at lunchtime but 
unchanged from the opening 
JeveL Monday’s dose was 76JL 
-Against the dollar, ft rose to 
nSSsfrom $1.6765, but lost 
ground against foe D-Mark to 
DM2L2025 from DMS-2175. It 
was unchanged against the 
at lSL7?hut^ped 
where, to. SFrZ.6975 from 
SFr2.7025.and FFr108625 from 
FFrO.0.9050. 

In Frankfort the D-Mark 
recovered against the Japanese 
yen. ouenhuc and cIobm at 
Y70J2S, npfiSn Y69^5 bn Mon- 
day. The dollar’s weaker trend 
helped the D-Mark to recover 
from its record low touched on 
Monday, and dealers still 
regarded foe Y70.00 level as a 
significant resistance point for 


the D-Mark. 

News of a higher than expec- 
ted West German trade surplus 
in June failed to give the 
DMark any support, although 
any benefits were probably off- 
set by foe Bundesbank’s deci- 
sion to leave its securities 
repurchase rate unchanged at 
425 px. 

The French franc was a little 
against. DMark in 
Paris, as traders stHl expected 
West German interest rates to 
rise. The D-Mark rose to 
FFr3L3925 from FFr03900, and 
dealers' pointed out that, 
although yesterday's sale and 
repurchase rate was left 
unchanged, the Bundesbank 
stQl had an opportunity to 
increase rates at tomorrow's 
meeting of the central co unc il. 
This could put further pressure 
on the French franc as interest 
differentials widen. However 
there is unlikely to be any 
renewed pressure within the 
EMS, dealers argued, unless 
the D-Mark recovers strongly 
against the dollar. . 


EMS EUROPEAN CURRENCY UNIT RATES 



Em . 
tart - 
rats' . 

--Qimry 

'totaEu 

canal 

race 

ASX 

dhugvet 

Dtitaaee 

Bnft% 

DuSTltae 

Wky-.-iW 

a xiafat 
7.97749 

+2.76 

460 

+154 

-QJ2 

±15344 

±15404 

GcnuntMtok 

9HKI ' 

258X54 

4.12 

- -060 

±15981 


6.90403 

7.05621 

-0M 

+0.48 

±13674 

DtaWlfar— 

23X943 

234964 

430 

-0.42 

±15012 

bWPto... 


0.7757 ID 
154X59 

. +036 

-036 

±16684 

±45752 





i far Em tftmftM 
ctatted fa Ren 


FfeKUTUn. 


to-23 

(jfaK 

flwtac 

One 

rrF— 



pH 

OJt-OJfcm 

120-UBm 

3.45-3.40*1 



POUND SPOT- FORWARD AGAINST THE POUND 


r on to |toHtotadtata«sfratfatgd^ 

STERLING INDEX 




ftato 

830 

M 

7U 

766 

950 

eat 

763 

766 

10.00 

fma 

763 

766 

1150 

m 

763 

765 

Ness 


763 

763 

LOO 

pa — — 

764 

763 

250 

pm 

7 W 

763 

350 

pa 

763 

763 

450 

pm 

7U 

763 



(fan 


W 

M12J0 

■uro 

■iuiA 

WjS - 2 iato 

2367^8 I 


11MV-1L74 

uas-ujr» 

1ILW,-Ift99% 


269- 27W, 


BtUHMtbl 

S»A«qBL 





20.94* -J0.9Sfa 
269li-270fa 


268 

139 

SSL 

A® 

XBZ 

6.09 

-1.94 

0.72 

LTfc 
-LSb 
339 
ajBZ 
66 7 
5.97 
834 


T km 


ooi-o. ... . 


«fsr 


34V .. . 

5 


2jn 

1.46 

SSL 

432 

2.94 

3S5 

6J09 

-1.41 

OBb 

059 

-L84 

336 

165 

667 

IS 


hc»«wm«t(f»iim n M Kl i Jfrw W.W7AOO.Sfa-ro ^ fwwtli MU 2.Il»Ln5q»GinBrtte; 


CURRENCY RATES 


**23 

am 

SpccW* 


rate 

Drattai 

Cmwgf 


% 

RHMt 

(Ml 

U5Do&iir™ 

630 

0.761636 

128408 

0648892 

159027 

CvudUflS__ 

8J5 

157912 


AtstriwSdL — 


172881 

146281 


515783 

436298 


950399 

7.97749 

rerr’TirfTP 

245823 

258154 

■taULGolMcr... 

4 

277727 

234964 

FiCKk Franc... 
RjfiMUr* 

ig 

833799 

182156 

755621 

154199 

•tapMoeYri- 


172045 

146541 

NvnarKnxir- 
Spcotti Pratt. 

8.96718 

739990 


160.995 

136283 

Stott Kmai, 

8% 

839733 


SbS® Franc _ 

2fa 

256801 

1.7190V 

Cm*DodL_ 
trtrthwl- 

ay. 

197-004 

'8.92605- 

0773771 


DOLLAR SPOT- FORWARD AGAINST THE DOLLAR 



2H 

Cte 

OhhhO 

H 





268 

-158 

■L22 

357 

150 

-033 

240 

-465 

•221 

■157 

-452 

059 

-164 

4J7 

349 

561 

p 


f OX to fatfaid are moot WS«m«rfaifa fro 


zm 

-165 

nl35 

3103 

150 

036 

127 

-43b 

4.92 
-121 
-462 
062 
-173 

3.93 


W1S0« rw»w*Brfa*22j.^ .; S’-.-s’i-A. 

currency^!^ 


■- toqtae bob fa far pfaffita. 


Ihb. 


to Mi ItaM toy «» *fa 

FHncU fmac 40404050. 


ufaSMlKalNMMfa 


**21 




761 

mi 

842 
UZjh- ■ 

■ 972 • 

881 
1426 
1U.9 . 

1313 

682 

445 
2413 . 

-S3 
+95 
-63 
■M : 
+19.9 
+J95 
+126 
-155 
-212 ' 
+783 

liSMta 

Mtaita^. 

*Mrt*iHMtUaa«.. 

■VtgtaaFrMC 

DmUiXitw — _. 

DcmcbcKat:-^. 


Fiwdi Fra«: 

r.~1tatatatataf 



EWKWNRW iCY IN T ERES T RATES 


7DW 


llfa-U 



7kw 


SBc 


n & na 


111 


UomM CwnO 

1962 -ltts Bank of I _ 
I975-100i“Jta*e» an hrfa«32 

OTHER CURRENCIES 


... WOK 1900- — 

Mk (Ban Amove to*9V9fa oar wn. mint. 


nton; 




EXCHANGE CROSS RATES 


MO 

‘ 1 201020-30.2430 
20656-2.0685 
469.10-46535 
. 73420-7.5630 

Gncar J 25440-25830 

1265- 13000 

km— 120.50* 

KnrraStU J 121325.22000 
.j».480M-0.4a050 
67 05 -67 J5 
4.4738-44850 



Lur.J 

S. M CF*i„.J 

T«f*u_ 

UJLE. 


3M665-3W9.50jBBl.00- 


1L9200- 12.0000 

'12265- 12275 

274.60-276.00 

*4890-46850 
15L40- 233.95 
70O»- 70050 
70.75* 

. 719.60 -7 2540 
|0.28«95-03B50B 
39.90-4000 
266W-26W0 




m 

n 

o 

Vri 

FFr. 

S Ft. 

HFL 

Lha 

D 

B ft. 

£ 

' S 

i 

0395 

1680 

1 

3202 

1906 

ztu 

1335 

1056 

6.464 

2697 

1605 

xrttrt 

2152 

2371 

1411 

2566 

1230 

8710 

39.94 

0M 
• YOt 

0312 

4.430 

0525 

7A77 

1 

1425 

7017 

1000. 

33*2 

4833 

0542 

1250 

1129 

1659 


0645 

9194 

20.96 

2986 

. FF7. 
SFf. 

0.921 

0371 

1347 

0623 

*r;j 

206.9 

8331 

10. 

4527 

2483 

1 

3329 

1340 

2U3 

8791 

LSQ2 

0.766 

6179 

2458 

r -HU. 
Ura 

0277 

0.422 

E 3 

E 3 

6216 

94.77 

2 T '^| 

E 2 

1 

1325 

6553 

1000. 

0372 

0571 

1836 

2830 

8 ^. 

0.484 

L490 



> ' 1 

tsa 

5257 

1618 

1305 

4519 

1750 

5387 

u« 

3634 

1 

3579 

3248 

100. 


*StHb9MC 


Yn m MOfc Frafa ft. per 10: Ua nr 1000; Befatan ft. par 100. 


RNANCIAL FUTURES 


Price trend boosts US bonds 


US Treasury bonds finished at 
the day’s high on Iiffe, recov- 
ering from a weak start, follow- 
ing encouraging economic 
news. 

A rise of 0.4 p.c. in July US 
consumer prices was generally 
In line with most expectations, 
but the market was particu- 
larly impressed with news that 
prices, excluding food and 
energy, rose by only 0.3 p.tL, 

UFTE UK C&J FUTURE* DnMH$ 


following a 0.4 p.c. gain in 
June. 

Fears about inflation and 
overheating in the US economy 1 
were also allayed by a fall of 7 
p.c. in July durable goods 
orders. 

September delivery bonds 
opened at 84-15 on Ltffe, and 
closed at 854)3, compared with 
84-24 on Monday. 

UFFE US TREASURY M 


Sterling based contracts 
recovered from the day’s 
lows .in the absence of any rise 
in the Bank of England’s 
money market dealing rate. 
Sentiment was also helped by 
the s t rong e r US bond market, 
but traders continue to fear 
that any weakness in the 
pound will result in another 
increase in UK bank base 
rates. 


UFFE FF4C HKX FUTURES VDMS 


Series 

HO* 

88 

Feb. 89 

Met 

89 

Stock 

Vol 

Let 

Vol 

Last 

Vol 

LM 

EOLDC 

S 440 

25 

17 TO 

3 

22.50 

50 

33 

S 43350 

G0LDC 

S480 

75 

2.70 

5 

830 B 




golop 

5400 

80 

250 

117 

460 

_ 

_ 

S 43310 

OOLDP 

5420 

40 

5.70 

3 

a 

_ 

_ 


GOLD P 

5500 

600 

>730 



— 


S 433-20 



5CP.S8 

OcL 88 

No* 

88 

EOElWtexC 

FL 220 

71 

1250 

10 

14.20 

_ 

_ 

FI. 231.12 

EOEIntexC 

R. 223 

105 

9 

— 

•- 

_ 

_ 


EOEIodexC 

FL 230 

552 

660 

20 

930 

_ 

_ 

FI. 23112 

EOE MexC 

R.235 

354 

430 

446 

630 B 




E0E Index C 

R. 240 

234 

310 

30 

450 

5 

7 

FI. 231.12 

EOE Index C 

R. 245 

111 

2 

70 

3.70 

5 



EOE Index C 

Ft. 250 

15 

050 

UB 

260 



R. 231.12 

EOE index C 

R. 255 


— 

100 

2 

— 

_ 

FI. 23112 

EOE Index P 

FI. 210 

305 

1.40 

9 

250 

— 

— 

R. 23112 

EOE Index P 

FI. 220 

180 

250 

177 

5.40 

— 

_ 

R. 23112 

EOE Index P 

R. 225 

210 

4.70 

39 

730 

— 

_ 

FI. 23112 

EOE Index P 

R. 230 

653 

630 B 

65 

9 

27 

1030 

FI. 231.12 

EOE Index P 

FI. 235 

281 

830 

80 

11.90 



FI. 23L12 

EOE Index P 

FI. 240 

162 

12 

60 

1430 B 

2 

17 

FI. 231.12 


Strike 

Dtootticmrats 

PnU MlUuanB 

Strike 

CeOKtulemnts 

CwmHIwMH 

Strike 


Price 

88 

& 

Dec 

660 


Dec 

2 

Price 

78 

m£ 

647 

Mar 

648 

Dec 

17 

Uar 

48 

JMQ 


90 

422 

502 

0 

B 

80 

503 

516 

37 

116 

ITOQO 

1140 

1165 

92 

222 

313 

0 

19 

82 

333 

361 

103 

161 

jjS 

MB 

739 

94 

22 

143 

0 

49 

B4 

216 

256 

150 

25b 

140 

394 

96 

0 

45 

142 

151 

86 

119 

an 

253 

401 

0 

175 

98 

0 

18 

342 

324 

88 

44 

123 

414 

523 

|MQA 

0 

63 

100 

0 

5 

542 

5U 

90 

23 

57 

557 

657 

1*9500 

0 

IB 


Esttasted tone total, cm 766 Ws 1363 
Proto dry's open lot. Crits 30565 Puts 39095 


umcfsamm 

05,886 tanU per ED 


Estimated mfane total. Cads 60 Puis 20 
Pmto day's apea tat. 1X16 1350 Pitt 1000 


UFFE EUIOMUAR OPUS 
Urn setts 


0 

0 _ 

0 254 

360 535 

860 923 

1360 1378 

Ftfhtttit mbsne total, Calls 3 Pau 0 
Piwto A aft na U. CaDs 19 Pub L32 


OBLMeiP 

FI. 9750 


_ 

f»4- 

li 

300 

1.20 

R. 9833 

1 0BL Index P 

FLIOO 

1 96 i 

250 

1 L_ 

{ 230 

250 

2-60 

R. 9833 


UFFE SHORT 5IEKJK 


SUtke 


Pats-setltaBto 

Strtte 



Suite 

Cafe-KtUsactts 


Price 

150 

See 

Oct 

Sep 

Oct 

Price 

9025 

m 

Dec 

66 


Dee 

14 

Ss 


Dec 

SB 


Dec 

155 

1330 

1330 

1 

17 

9050 

76 

48 

0 

21 

8800 

42 

81 

13 


UO 

830 

832 

16 

71 

9075 

52 

33 

1 

31 

25 

65 

21 

43 

165 

396 

468 

100 

207 

9100 

29 

21 

3 

44 

8950 

14 

50 

35 

53 

no 

134 

220 

336 

459 

9125 

9 

13 

8 

61 


7 

38 

53 

66 

175 

28 

84 

730 

823 

9150 

2 

7 

2b 

80 

S3 

3 

28 

74 

81 

1B0 

4 

26 

1206 

WM 

9175 

1 

4 

50 

102 

1 

20 

97 

98 


Esttafad ntm total. Calks 0 Pus 0 
Proto day's open let Crib 752 Pots 1733 


EttmUed ntane total. CNN 0 Pots 100 
Proto daft cm U. Cads Z753 Puts 4249 


EXJmto tow tataf. Crils 520 Pair 864 
Proto dip's often loL Calls 18149 Puts 16132 


PULMaPHU SE US 0P1MK 
02300 [rods per £1) 


_____ :e/s 

02^89 (Mb poffl 


Strike 





Pus 


Suite 


Calfc-ottleaxMs 



PntHritltnms 


Price 

1.650 

1% 

Oct 

467 

to 

530 

Dec 

5.77 

vk 

Oct 

1.92 

mu 

276 

Dec 

307 

Prta 

1650 


Oct 

530 

to 

500 

Dec 

630 

lS) 

Oct 

235 

to 

335 

Dec 

435 

L675 

237 

332 

383 

4.45 

LB9 

296 

307 

409 

L700 

L75 

265 

325 

305 

165 

400 

500 

6.75 

L7TO 

138 

234 

235 

338 

303 

423 

5J6 

608 

L750 

030 

130 

L75 

235 

705 

B20 

9.05 

10.00 

L725 

075 

144 

201 

231 

439 

507 

6.76 

704 

1000 

0+0 

03® 

a 

L45 

11.95 

12.55 

1335 

13.90 

1.750 

8JS 

iJ.7 

137 

1.92 

604 

7.75 

836 

928 

1050 

035 

030 

0.90 

tfciw 

1725 

1705 

1825 

L775 

SUB 

(L55 

0.99 

L47 

9J0 

902 

1053 

mo 

1.900 

030 

. 


0J0 

1170 

- 

- 

2250 

LBOO 

0.05 

034 

065 

L05 

1137 

1L93 


1336 

L950 

040 

- 

- 

0.45 

1140 

- 

- 

1700 


Pmto do's npm tat: CaHs 
Pmto A&i tone Cdb ; 

LONDON (UFFE) 


. Put* 442A44 

pasirjfflo 


Etatod tone total, Cto HU Pots RM 
P roto iifi opts lot Cails 392 Pets 200 


CHICAGO 


21-YEAR Vt. N0T»UL CUT 
ES4,8N32toell04% 


ILL TREASURY MBS KSD *% 

SUMN 32edi tf 1M% 


IS 


Otte 

94-11 

94-29 


954L 


Low 

94-05 

94-23 


BUnta Votes* 16699 0642U 
Pmto (fays opto to. 46468 GS63MI 

7-UYEU9%WmaMLCBr 

SMOOJfafcof lMtt 


s 


One 

93-31 


W* Low 


Pro. 

94-15 

9501 


hw. 

9400 




IS 

Mar 

Jn 

IS 

Hw 


Latest 


84-11 

8323 


84-15 

83-26 


Low 

84-16 

8328 

83-10 


8207 8207 8101 


Pm. 

8419 

83-31 

83-11 

82-24 

82® 

81-22 

81-07 

8025 

80-12 

BOW 

79-21 


JAMM3E YEHOsaSS 

YX2J0 S per Y1M 
TSm 


& 

Ott 

Mar 


0.7499 

03570 


ar 

0.7573 


—tzt 

0.7490 

0J561 


Pm. 

0.7505 

0.7575 


a , 0 04) 

Pmto day's opto taL 118 08 


6% HTBHUL LOW TEH JAPANESE G8Y7. 

■OKYZOta 1908 b eflM% 


ILS. TREASURY 8BX5 (MO 

HapNdsolin% 


One Hkh 
5m 10234 UgJB 

Dec 10107 1QL07 

EctinudVatae 640 0781 
Pmto deriflpw taL 77b 0591 


Low 

10235 

10005 


Pm. 

10265 


ss 

Uar 

Jbj 

S2 

Dec 

liar 


latest 

92.71 

9226 

9238 

9205 


9226 

9218 

9205 


to 

9267 

9221 

9214 

9204 


Pm. 

9268 

9225 

9216 

9206 

9L97 

9108 

9103 


THREE-HONTM EBSODQUAR (DUO 

SUa peksh if 169% 


1HKX RtoTH STfXUHG 

£5MOM tote N 118% 



dose 

8^ 

Ue 

Pfar. 

Sfa 

8829 

8823 

8833 

®4£ 

88.47 

8832 

88.42 

8857 

Ma- 

88.77 

8803 

88.73 

8807 

lta 

BB07 

88.93 

8883 

8298 


& 

Dec 

Mar 

Sep 

Dec 

Her 


Latest 

9125 

90.75 

90.75 

9061 

9050 

40.40 

9034 

902S 


9^ 

90.78 

90.76 

9061 

9050 

90.41 

9035 

9029 


Low 

9120 

9069 

9068 

9034 

90.43 

9034 

9029 

9023 


Pm. 

9123 

90.75 

90.73 

9039 

90.48 

4038 

4031 

9025 


SWSS FRANC (06; 

SFr 125JMM SperSFr 


ETSSSBASta & POORS 500 UgOSC 

S5M tines Mez 


Est. VoL One. ftys. not down) 20634 08788) 
Pmto dw^s open taL C670 (440441 


FKE100MKX 
£25 pir W fata peW 




ffv'.n 




iWiT'ui 

I'n - fJ 

[•T v. VI 


tI 

rTT-'i 







htjTrj 

Hi 




■'7-1 :-/! 


Sep 

Dee 

Mar 

Jan 


latest 

256.90 

25920 

261.90 

26450 


258 jSo 

260.45 

26295 

26550 


low 

256.75 

25915 

26L40 


Pm. 

25660 

259.05 

26165 

26350 


EUROPEAN OPTIONS EXCHANGE 


Nov. 88 


Feb. 84 


M«y 84 


Sep. 88 


OcL 88 


Nov. 88 


S/FI C 

FL 205 

65 

1020 A 

2 

10 

_ 

_ 

FI. 214.40 

S/PIC 

FL210 

87 

5.70 

10 

600 A 

— 

— 

FI. 214.40 

S/FI C 

R. 220 

59 

120 

2 

2 A 

me 

— 

FI. 214 40 

S/FI P 

FL195 

45 

aio 

— 

— 

— 

— 

FI. 214 40 

S/FI P 

R. 200 

125 

030 

— 

— 

am 


FI. 21440 

NFIP 

FI. 205 

350 

0.40 

8 

1.55 

— 

— 

FL 214.40 

S/FI P 

FI. 215 

101 

3 

12 

5.40 

- 

- 

F). 214.40 



0 a. 80 

Jan. 89 

Ape- 89 


ABNC 

FL45 

527 

130 

111 

240 

13 

3.40 

FT. 42J0 

ABNP 

FI. 45 

60 

330 

314 

430 

10 

4.90 

R. 42.10 

AEGON C 

FI. 80 

106 

3 

5 

530 

2 

730 

FI. S030 

AKZQC 

FL 140 

792 

5 

171 

830 

47 

1230 

FI. 13630 

AKZ0P 

FT. 130 

257 

330 

60 

660 



R. 13630 

AMEVC 

R. 50 

44 

230 

2 

3.80 B 

9 

530 

R. 50.80 

AM ROC 

FI. 80 

366 

0.60 

70 

230 

17 

4 

R. 7330 

BUHRMANN-TC 

FI. 55 

208 

1.90 

IB 

330 

15 

4.40 

FL 5330 

BUHRMANN-TP 

FI. 55 

55 

2.90 

2 

3.60 



FI. 5330 

ELSEVIER C 

FI. 60 

168 

230 

20 

360 

— 

— 

FL 5730 

ELSEVIER P 

FL 60 

63 

4 

1 

5 

30 

8 

FI. 5730 

GST-BR0C.C 

FI. 40 

269 

250 

84 

4 



FI. 39.90 

GLST-BR0C.P 

FL40 

95 

2 

3 

3.40 

I 

430 

FI. 39.90 

H00G0VENSC 

Fl.bO 

767 

3 

37 

5 

13 

630 

FI. 56 

H 00G OVENS P 

FI. 56 

450 

4 

55 

530 


— 

FI. 56 

KLMC 

R. 35 

174 

160 

52 

330 

14 

430 

R. 34.10 

Kill P 

FI. 35 

85 

220 

13 

3.40 B 

7 

430 

H. 34 JO 

KNPC 

FL170 

124 

530 

68 

1030 

5 

L430 

FI. 16530 

KNPP 

FL 160 

86 

4 

5 

6.70 

1 

9 

FL 16530 

NEDU0YOC 

FI. 220 

89 

1130 

I 

19 



R 222 

NEDLLOYDP 

FI. 220 

16b 

830 

64 

1430 

— 

— 

fi -rr> 

HAT. NED. C 

FL65 

316 

1 

27 

210 

2 

330 

FI. 60.40 

HAT.NED. P 

FL60 

59 

230 

25 

4 



FI. 60.40 

PHlUPSC 

R.30 

257 

330 

56 

430 

- 

— 

FI. 3260 

PHILIPS P 

FI. 30 

10 

030 

8b 

1.70 

10 

230 

FL 3260 

ROYAL DUTCH C 

FJ. 240 

1296 

330 

205 

6.80 

1 

9 B 

FI. 23220 

ROYAL DUTCH? 

FI. 230 

155 

630 

126 

9.20 

U 

10.80 

FI. 23230 

UNILEVER C 

FI. 120 

853 

220 

173 

430 

10 

6.90 

FI. 11130 

UNILEVER? 

FI. 110 

112 

330 

165 

630 

8 

730 

FI. 11130 

WE5SAMEHC 

Ft. SB 

50 

130 

20 

4 JO 


- 

FI. 75.40 


TOTAL VOLUME IN CONTRACTS : 31 £44 


A-Asft 


B-BU 


C-CMI 


P-Pnt 


BASE LENDING RATES 








Kfl 


irl 


tfl 






K'ffei'iii-ffBi 

vtN 


Grfl 


!■ 






toTTiHTffT niTB 

mm 


GyN 


TB 

^ ■!»- ' ' Ml 




BtN 


KrH 


yfl 


■■ 




htG 


G i H 





PI 




■M 


miM 


m 








■223h2322S£ 



iCi 


^GiLl 





HTH 


Gyfl 


TM 







wyN 


G|fl 


M 







Byfl 


Gill 


yl 


Bank HapoaOin.M 

Bank Land (UK) — 

BanfcCrafiL&CMn. 

BaokofQim 

Baak of kriaod 

Bank of Ub 

Bvk of Scotland __ 
Bmpc Beige Ud__ 
BardapBuk. 


Benduoart Bask PIC _ 
BeliaerBankAG 


Fteadal & &hl Sa _ 

Rnt National Bad; Pk. 
B Robert Fkfltig& Co. _ 
Robert Fmer&Ptnrs.. 

Gnbank 

• Gidnoess Blahon 

HFC Bank pic. 


• BandnsBari: 

Bailable & Gen to Bk, 

• HID Samel 

C.Hoare&Co 


11 

S' 

12 

U 

n 

n 

ii 

n 

in 


u 


SUBdard Chartered 11 

TSB U 

UDT Mortgage Exp flLC 

UmtedBkofKiwah 11 

Doited Morahi Bank.. U 

Uuitp Trssl Bank Pic 11 

WestmTnEt 11 

Weapac Baik Carp. — 11 
Wbitavrayleida — . ll>z 
YoffcbiteBask 11 




H.l, v, u 1 1 . fth 








rryinBBK 





N’J'M. teijLi 





■J22ESHSIE 











Ckae 

I8L40 

18320 


181% 

18330 


lew 

18050 

18225 


afar 


Etotod VbfaM MO OM 
Pwitodfa* ! epee taL 108050020 


Pm. 

18250 

18430 


fijapsUt efUK 


Sep 

Dec 

Nbr 

Joe 


Oase 
4126 
40.77 
90 Jb 
9062 


RM 
nii 
90.77 
40 J7 
4062 


Low 

4120 

9069 

4069 

4055 


Pm. 

4124 

4036 

40.75 

9061 


Brt.VbLttae.flss. to tom) 6824 (43187 
Pmto d«r< opei taL 4UB0 (420157 


US TREASURY JflNK 1% 

SlM5M32to*ll0t% 


£ 


Cbn 

8583 

84-15 

84-00 


8® 

04425 


Low 

B4-U 

84-05 


tor. 

84-24 

84-06 

8323 


iw— i Y u li mf em mm 
Pttito d*r*s open b*_ 7912 (B3U7 

CURRENCY FUTURES 


LVFKniLBIE EZSJM8 S pv£ 


s 

Uar 

Btijntrd VMne 56 (28) 
Pmto bfaTtBpa taL 142(2057 


Law Pm. 
16785 16765 
16660 16650 
16580 


POOHS-S (FMEBR EXCHANBD 


un& 


1-tntiL 

16758 


3 to- ML 12 -oUl 
16783 16588 16450 


U—IIUUIWI ll w I 


% 

Mir 


Ulett 

16826 

167UB 

16610 


IU& 

16710 

i sfcin 


Lew Pm. 
16768 16818 
16650 16706 
- 16608 


MONEY MARKETS 


FT LONDON INTERBANK FIXING 


Upward pressure 




| 6 oontfa US Oottas 

Hi | 

otter 8% | 

M sa j otfa 'si 


INTEREST RATES had a 
firmer tame in London. Three- 
month interbank finished 
unchanged at 11%'UK p.c., 
after the Bank of England teft 
it* money market dealing rate 
unchang ed. Earlier in the day 
three-month money touched 
lUHlft P-a as sterling looked 
vulnerable, and speculation 
Increased about a Else in UK 
bank base rates. 

Talk of higher' rates in the 
US and West Germany, cou- 
pled with fears about tnmor- 


UK 


tim 


row's UK trade figures, leSt ^foe 
market uncertain how long the 

present base rates of 11 P-c. 

will bold. 

The Bank of England ini- 
tially forecast a money market 
shortage of £S50m, but revised 
this to ESOttm at noon. 

Assistance of £2Nm was pro- 
vided when the authorities 
bought bills outright before 
hr*cb, hy w«y £18Sw bank 

hiiin tn band g at 10% P-C4 
£3fco Treasury MH» in bmad 4. 
at 10% TJ.C 4 and. £9Qm local 

not opwate in the market dur- 

^arrssj'sst' 


sury bills drained £327m. with 
Exchequer transactions 
absorbing £220m. These out-' 

weighed a foil in the note dr- 

gnlntlm «H4(np BBm to liquid- 
ity and bank balances- amove 
target of £190m. 

The West German Bundes- 
bank council meets tomorrow 
' after its gnwwmw break, amid 
speculation of a possible rise in - 

foe discount or Lombard rates. 

Call money rose to 4^5 px. 
from 4JM) px. in Frankfort, 

despite the offer off liquidity 

from the Bundesbank, via a . 

28-day securities - repurchase 

agreement - tender, at an 
unchanged fixed rate of 125 

px. 

There was some surprise, 
that the repurchase rate was 
not increased, and dealers 
believe foe situation Is still 
•highly uncertain. 

The market wiltlookfor 
guidance on credit policy from 
foe amount of fftmns provided 
at foe tender, and whether this 
points to a further tightening 

of the Bundesbank’s niohetaxy 

stance at tomorrow's council 

meeting- -. ■ ? 

Funds will drain from this 

market today as a PMttL 2 hri 

repurchase agroeanent expires. 
Tax payments have also tight- 
eoefl credit oopffltiow s lecently,. 

and repeated intervention by 

foe Bundesbank to pjpport the 
D-Mark on. the . fc 
exchanges has reduced 
fry in the domestic " 


Tfataerta«relfaArM»Mtai to B ito d ri tttiKtogtto-matorftl«liMtoBgtaramftifnDw 

to ta at tow to fl* RRRR tanks a LLOO ajL tto wortioB to Uw tola m Kadta Wtautato 
aS. Bto of Trim Beta* Bto. Burnt **ta» if Ito to Uor*« tartar TfBL 


MONET RATES 


Treasury Bills and Bonds 


(UtaKhtbnt) 


10 


W.1 

NrtJitoM ta w fau . 


Owe mama 

Ttaowwtt 

Three oonflL. 

637 

6.74 

7.40 

Tbratrewr — . 

ntrjexr 

866 

B-94 

, OIK 

flwejear 

Taijea 

832 

873 

Wger 

30j*r 

933 

939 


‘ ' " 

B3 

MEM 


FI 




*90-560 

i»5ji 

810430 

7V7fa 

530-435 

SMS 

Bfa+Bfa 

5.00 

635 





Uta. 



; 

liaifa 

m 


iS 

■ratot 

w 

7V7fa 

*vw. 

- 



PBBBB 

BHBG 

■■■■ 

■■ 


mmomm 




LONDON MONEY RATES 


OvcnfaM 




_{ 10 fa 


Ufa 


ig|fflSSSS!d. 


7 rtv 
notice 


Ufa 

Ufa 


Moot* 



Sfe 

Uotoi 



OM 

Year 





j Joty.29, 1988. 

. h llUWpx^ !«c6em« 

H * Hi: U66 PA. ItataSnTai* far pertoS juU 33968 u Joly24 .1468. Scheme IV&V: 
10311 px. Local tohortty and nuance Homes ^ aqUcg. to m iwb days’ 

.gg^aaascsEa 

Prtpwta Wta faYtadi S per cwk. 


X't'PZ 


Adjourned Meeting of Warrant Holders 

THORN EMI pic 


(Rcgtacrcd in England Nol 229230 



Bonds due 1992 

(the “Warrant HoldosTand tbe“Warrants" respectively) 


In accordance with the terms and conditions of the Instrument by way of 
Deed Roll dated 14 January 1967, notice is hereby given that a Meeting of 
Warrant Holders mil be held at the offices of Rowe & Maw, 20 Black Fnars 
Lane, London EC4V 6HD on Thursday. 8 September, 1988 at 9.00 am., far 
the purpose of consid e ri ng and, if thought fit, passi ng the following 
Resolution winch will be proposed as an Extxaoniinaxy Resolution: 

EXTRAORDINARY RESOLUTION 
THAT this Meeting of the Holders of the Warrants issued with the 
£60,000,000 7%% Bonds due 1992 (the “WarramsT) of THORN EMI pic 
("tire Company”) now outstanding constituted by an Instrument by way of 
Deed PoU dated 14 January 1987 (the "Deed RxT) executed between the 
Company and Banque Indosucz Luxembourg ftire Bank") hereby > 

(1) generally and unconditionally authorises and gives consent to the 
Company at any time and from time to time to make market purchases 
(withm the meaning of Section 163(3) of the Companies Act S65) on Tire 
International Stock Exchange of the United Kingdom and the Republic 
of Ireland Limited of Ordinary Shares of 25p each in the capital of the 
Company for cancellation suiweet to and in accordance with any authority 
from time to time granted by Resolutions of its shareholders PROVIDED 
THAT:- 

{a) the ma ximum price per Ordinary Share on any exercise of the 
authority is not mere than 5 per cent, above the average of the middle 
market quotations taken from The Stock Ex ch ange Daily Official Lett 
for tire ten business days prior to making any purchase; and 
(b) tbenranmnn grice forany purchase is 25p being the nominal value of 

(e) the price in each case wiD be exclusive of any corporation tax payable 
by me Company and/or e xp e n se s ; 

(2) sanctions and approves each and every modification, abrogation or 
variation of the provisions of the Deed roll and of the rights attached to 
the W arran ts and each and every compromise or arrangement in respect 
of tire rights of the Warrant Holders as is or may be involved in the 
implementation of any such purchases and cancellations; and 

(3) authorises the Bank and/or the Company to concur in, execute or do any 
document, act or thing necessary to give effect to such authorisation, 
consent, sanction and approval of each and every such modification, 
abrogation, compromise or arrangement. 

Dated 24 


S8S 


4 Ten tendon Street, 
London WIA2AY 


BY ORDER OFTHE BOARD 
Tfcresa Prichard 


sofa letter dated „. 

j off the proposed purchase by the Company of its own I 
s are available for collection, and copies of the Deed Pall constituting 
the Warrants axe available for inspection by Warrant Holders in each case 
during normal business hours on any weekday (excluding Saturdays and 
pubtic holidays) at the offices of Rowe&Maw. 20 Black Friars Lane, London 
EC4V 6HD and tbs specified offices of Bankers Trust Company set out 
bdow, op to and urrinmitg the date of the Meeting and ar the Meeting itself. 
As indicated in that letter, the Company is seeking authority from its 
Ordinary Shareholders, holders of the ILS per cent- Cu m ula t ive Preference 
Stares, and of the 7 pet cenL Convertible Redeemable Second Cumulative 
P ref e r e n ce Shares 1992/99, in ter alia, to make market purchases of rroto7-5 
per cent, of its issued Ordinary Share capital, r e p re sen t in g 20,748^02 
Ordinary Stares, subject to the price 1 initiations set out m the above 
Extraordinary Resolution. 

Shareholder authority will, if granted, expire on 30 September. 1989. 
However; it is the Board’s present intention that the ne cessary resolution to 
renew (he authority wiD be proposed at the 1989 Annual General Meeting 
and relevant Class Meetings. The Deed Poll p rovides that such purchases 
require die consent of the Warrant Hokleis ty Extraordinary Resolution. So 
as rorcticw tire Company of the ad min ist r ative burden of convening farther 
mert'mjg* of Vftmant Holders, the consent contained in the above 
Extraordinary Resolution will not require annual renewal hut mil be valid 
until redemption of the Warrants in 1992, subject to there not bring any 
mateririissueofOidmarySharesintiiemiervemiigperiodL 1 

Implementation of tire proposed power to purchase the Ordinary Shares 
of the Company shook! not adversely affect the rights of the warrant 
Holders to subscribe for Ordinary Shares. The Directors bdieve that any 
purchases of Ordinary Shares which were to be made tinder the authority 


would be beneficial to the Warrant Holders byreason of the i mprovement in 
their subscription prospects. On 30 June 1988 (the latest practicable date 
before the printing of the Chairman's letter referred to above) the middle 
market quotation for an Ordinary Share derived from The Stock Exchange 
Daily Official List was 6S7p. If the proposed authority were to be exercised in 
full at the share price on 30 June. 1988, Shareholders Funds would be 
reduced by £136315,687. 

QUORUM AND VOTING 

At the adjomned Meeting two or more persons present in person holding 
Warrants or voting certificates or being proxies (whatever the number of the 
Warrants so held or represented) shall form a quorum and shall have the 
power to pass any resolution and to decide upon all matters which could 
properly have been dealt with at the first Meeting bdd on JO August. 1988 
had a quorum been present at that Meeting. 

The Extraordinary Resolution, if duly passed. wQ] be bindme on all 
Warrant Holders whether or not they are present or represented at the 
Meeting and whether or not they voted in favour. To be passed, the 
Extraordinary Resolution requires a majority consisting of not less than 
three-fourths of the votes cast m respect of it, whether on a show of hands or 
on a poll. ' 

A Warrant Holder wishing to attend and vote at the Meeting in person 
must produce at the Meeting a valid voting certificate issued by the Bank 
relative to tire Warrants) in respect of whiebne wishes to vote. 

A Warrant Holder not wishing to attend and vote at the Meeting m 

to the person whom he wishes 
1 instruction (on a block voting 
A. or Morgan Guaranty Trust 
Company of New York, Brussels Office, (as an operator of the Euno-CJear 
System) at the addresses set out below) appointing a proxy or instructing the 
Bank to appoint a proxy and to attend aim vote at tire Meeting in accordance 
with his instructions. 

Each block voting instruction should be deposited at the Head Office of 
the Bank (the address of which is set out briowj or at such other place as the 
Rank shall designate or approve not less than 24 hours before the time 
appointed for bolding the Meeting at which the proxy named in the Mock 
voting instruction proposes to vote and in default me block voting instruction 
shall not be treated as valid unless the Chairman of the Meeting decides 
otherwise before such Meeting or adjourned Meeting proceeds to business. 

Warrant Certificates may be deposited with (or lo the order of) the Bank, 
far the purpose of obtaining voting certificates or block voting instructions, 
appointing proxies until 48 hours before the time fixed for the Meeting but 
not ihercaiten Warrants so deposited or held will be released to concur with 
the first to occur of: 

(i) the conclusion of the Meeting or any adjournment thereof, 
or if a voting certificate has been issued 
(3) the surrender of the voting certificalefs). 
or ifa block voting instruction has been issued 
(m) upon the surrender, not less than 48 hours before the time for which 
die Meeting is convened, of the receipt for each such warrant 
c e rti fi c at e which is to be released to the Bank, coupled with notice 
thereof being given by the Bank to the Company. 

It should be noted that voting certificates or block voting instructions 
which have aireadybeen obtained or isued in relation to the first Meeting 
on 10 August, 1968 will remain valid for the purposes of voting at the 






Every question submitted to the Meeting shall be derided in the first 
instance by a show of hands and hi the case of equality of votes the Chairman 
of the Meeting shaD. both on a show of bands and on apoH.havea casting 
vote in addition to the vote or votes (if any) io which the Chairman of the 
Meeting may beentitled as a Warrant Holder or asa proxy 

THE BANK 

Banqne indosoez Ijmm faoa rg, 39, Affix: Scheffer, L-2S20 I.mtmhonrg, 
At tenti o n: Coupons Do mi c i le s . 

Bankers Unst Company, Dxshwood House, 69 Old Broxf Street, London 

EC2P2EE. 

CE3)ELSA*67 Bonlevtnl Grand Dochesse Charlotte, Lmtembonrg-VlBe, 

Luxembourg. 

OPERATORS OF THE EURO-CLEAR SYSTEM, Morpm Guaranty 
That Company of New York, Brussels Office, 1000 Rue de fa Rggeace, 
B-1040 Brands, T ' ' 




i 






































































































24 



5®3hi4s,i, *<& 








































































































































































































































































































































































































































































27 41 10J 

- a* - 

3J UU2 
1 7 34Z16 
75 04 453 
1 5 0.4 44.4 

it xo i*i 

33 26 21(5 

47 01 <a% 

3.4 17 JIB 
31 34 »0 
22 2.4 234 
10 2 1 110 

- 37 - 

13 7.0 12.1 

7.1 2.4 66 
87 U 171 

2.7 4.4 «JJ 

« 31 * 

21 143 

3J It »3 

1.4 6 3 14.1 

2.0 30 14.1 

- 57 _ - 
20 Afi 136 

31 31 0.2 

6.2 13 1U 

3.7 1.7 166 

32 1J 111 
"4 3J 44. 1 

1 40 262 
1 0 4 17.7 

1.1 3*12,1 

0.3 62 - 

5.0 11 21.8 

• 2.7 6 

• 62 * 


liam 

dim 

*3 3 316.0 

2 oi 5.911.9 
2.(117 9 
3.M 23 13.9 

3.3 1425.9 

M 27j 6 

25} 3-i}l28 

2fl 3.314* 

4J2.U « 


17 62U10I 
24 5.1 10.4 
4 12 • 

21 5.6 8.3 
20 4.1 03.61 

6.2 11 18.0 

4 60 • 

2 7 3 6 U.X 
72 3.3 103 

1.4 63 136 

27 3 0 16.5 

3 2 23 166 

3.4 3 4 11.4 
3 0 26 13.0 
3 1 22 11.4 
4( 38 53 

- 23 - 

3( 31 13.4 
3 5 0.7 421 

3.5 27 113 

* 3.4 * 

- 3.4 - 

55 16 14.7 

2.1 4.0 122 

13.4 0.4 23.8 
24 3.0 HUB 

2.0 4.0 13.8 
6X 1.6 127 

- 87 - 

23 33 14.0 


3.7 3.5 1.7 

2.0 32 14.4 
4.5 13 235 
7 6 1.5 9.6 

3.1 2.0 20.6 
23 4.0 127 

* 27 • 

4 3.1 » 

27 23 180 
2JB 3.215.1 


14 82 128 

21 3.7 148 

22 67 187 

- 4.0 - 

- 43 - 

2.1 3.C 20.1 

- 42 - 

2.1 6.7 92 
U *A M3 

23 7.4 35 

15 OX 88 

- 35 - 

- 5.6 - 

- 5.2 - 

1.0 §j 34.6 
12 6X 16.1 
1* 63 1*5 

2.4 4j 155 


I t 5.1 1*8 

H SJ 9 

IX 4.4 178 


44 27 61 
2£ 4J 164 

































































































































































cover relates to previous dividend or forecast. 

4 Merger bid or reonpnlsatlon In progress 
0 Not comparable 

♦ Same I me rim; reduced final and/or reduced earnings 
Indicated 

f Forecast dividend; cover oc earnings updated by latest 
Interim statement. 

j Cover allows for conversion of shares not now ranking for 
dividends or ranking only for restricted dividend, 
t Cover does not allow for shares which may also rank for 
dividend at a future date. No P/E usually provided. 

L Np par value 

Fr. Belgian Francs. Fr. French Francs 55 Yield based on 
assumption Treasury Bill Rale stays unchanged until maturity of 
stock, a Annualised dividend, b Figures based on prospectus or 
other offer estimate, c Cents, d Dividend rate paid or payable on 
part of capital, cover based on dividend on full capital, e 
Redemption yield, f Flat yield, g Assumed dividend and yield, ft 
Assumed dividend and yield after scrip Issue. J Payment from 
capital sources, k Kenya, m Interim higher than previous total, b 
R ights Issue pending q Earnings based oo preliminary figures, s 
Dividend and yield exclude a special payment- f Indicated 
dividend; cover relates to previous dividend. P/E ratio based on 
latest annual earnings, n F orec ast , or estimated annualised 
dividend rate, cover based on previous year's earnings, v Subject 
to local lax. x Dividend cover In excess of 100 times, y Dividend 
and yield based on merger terms, z Dividend and yield Include a 


on prospectus or other official estimates for 1988-89. fi Assumed 
dividend and yieM after pending scrip and/or rights Issue. H 
Dividend sod yield based on prospectus or other official estimates 
for 19B9. K Dividend and yield based on prospectus or other 
official estimates for 1987-88. L Estimated annualised dividend, 
cover and P/E based on latest annual earnings. U Dividend and 

S leld based on prospectus or other official estimates for 1988. N 
Ividend and yield based on prospectus or other official estimates 
for 1987. P Figures based on prospectus or other official 
estimates for 1987. a Gross. R Forecast annualised dividend, 
cover and p/e based on prospectus or other official estimates. T 
Figures assumed. W Pro forma figures. Z Dividend total to date. 
Abbreviations: d ex dividend; m ex scrip Issue; «r ex rights; a ex 
all; tf ex capital distribution. 


REGIONAL & IRISH STOCKS 

The following is a selection of Regional and Irish stocks, the 
latter being quoted Id Irish currency. 


SKBSStd Ad Arnotu. 

Butt "3 

HalllR.tH.1. 

IRISH Helton Hldgs .._.y 



TMc service Is available to erety CSmoany dealt la oc Stock 
Fvthunga throughout the United Kingdom fora fee of £940 pel 
man for each security 











































































30 


FT-ACTU ARIES SHARE INDICES 


Iliese Indices are the Joint miip BgH ow of the FfaneU Times, 
the hsfifaife of Actuaries aid the Faculty of Actuaries 


FINAN CIAL TIMES WEDNESDAY AUGUST 74 198ft 

OPTIONS 




EQUITY GROUPS 
& SUB-SECTIONS 



(Opening index 1820.8; 10 am 18203; 11 am 18213; Noon 1813 3 ; 1 pm 1814.2; 2 pm 1816.6; 3 pm 1815.8; 3 JO pm 1815.8;4 pm 

t Flat yield. Highs and lows record, base dates, values and constituent changes are published la Saturday issues. A new list of constituents 
is available from the Publishers, The Financial Times, Bracken House, Cannon Street, London EC4P 4BY, price 15p, by post 32p. 


• First Dealings Aug 22 

• Last Dealings Sep 29 

• Last Declarations Nov 24 

• For settlement Dec 5 

For rale Indications see end at 
London Share Service 

Stocks favoured tor the call 
included Maitay, MortoBt Capital, 


TRADmOHAL OPTIONS 


Aug 22 London Internationa], Standard 
Sep 29 Chartered, Dunton Group, Eagle 
ns Nov 24 Trust, Stormgard, J- Jarvis, Bri- 
Dec 5 tannia Arrow, OH. Bailey, BuB- 
7s see end of era, Rea Bros, and Cttygate. A 
rice put was arranged In Bristol Chan- 

tor the call . net Strip, while a double option 
loriofc Capitol, was transacted In Sears. 


67 - I 4 

47 55 10 

30 37 I 28 


23 Total Contracts 23.755 Calls 15,154 Puts 8,601 
FT-SE Index Calls 2241 Puts 2187 


TOYOTA [TMCC| 

MOTOR 

CREDIT 

CORPORATION 


Toyota Motor Credit Corporation 

Can. $100,000,000 


10°/o Notes due 1991 


J.P. Morcan Securities Ltd. 

Merrill Lynch International & Co. 

Union Bank of Switzerland (Securities) Limited 

Bank of America International Limited 
Bankers Trust International Limited 
BNP Capital Markets Limited 
Credit Lyonnais 
Daiwa Europe Limited 
Dresdner Bank Ajctiencesellschaft 
McLeod Young Weir International 
Morcan Stanley International. 

Salomon Brothers International Limited 
SBCI Swiss Bank Corporation 

Investment banking 

Tokai International Limited 


LTCB International Limited 
Nomura International Limited 
Wood Gundy Inc. 

Bank ofTokyo Capital Markets Group 
Banque Bruxelles Lambert S.A. 
Chase Investment Bank 
Credit Suisse First Boston Limited 
Deutsche Bank Capital Markets Limited 
Ham bros Bank Limited 
. Mitsui Finance International Limited 
The NIkko Securities Co„ (Europe) Ltd. 

Sanwa International Limited 
Shearson Lehman Hutton International 
Westdeutsche Landesbank Girozentrale 


21m June, 1988 


These securities are not registered under the Securities Act ofl933 and may not be offered,soldanldaend 
in, or to nationals or resident of the United States:This announcement appears as a matter of record only. 


NEW ISSUE 


AH thae securities having been sold, this announcement appears as a matter of record only. 


August. 1988 


TOYO SUISAN 

Toyo Suisan Kaisha, Ltd. 

(Incorporated with limited liability in Japan) 

U.S.$100,000,000 

4 Vi PER CENT. GUARANTEED NOTES DUE 1993 WITH WARRANTS 
TO SUBSCRIBE FOR SHARES OF COMMON STOCK OF TOYO SUISAN KAISHA, LTD. 

unconditionally guaranteed as to. payment of principal and interest by 

The Mitsui Bank, Limited 


ISSUE PRICE 100 PER CENT. 


The NIkko Securities Co., (Europe) Ltd. 


Mitsui Finance International Limited 

ANZ Merchant Bank Limited - 
Credit Lyonnais 
Daiwa Europe limited 
Klexnwort Benson Limited 
LTCB International Limited 
Merrill Lynch International & Co. 
Norm dtnlgn International Limited 
J. Henry Schroder Wagg & Co. Limited 
Tokai International Limited 


Goldman Sachs International Corp. 

Baring Brothers & Co., Limited 
Dai-khi Europe Limited 
IB J International Dmiigj 
Lombard, Odier International Underwriters S.A. 

Maruman Securities (Europe) Limited 
Mito Europe Limited 
Salomon Brothers International Limited 
Sumitomo Fin a nce International 
Tokyo Securities Co. (Europe) Limited 


Westdeutsche Landesbank Girozentrale 

















































































































































































































































































U ‘ 


^j/i 


Fresh slide leaves FT-SE down 14.4 


London markets were given 
another thorough yes' 

■terday as the latest data on the 
economy - the second quarter 
*ox»s domestic product (GDP) 
Ogive - was seen as further 
evidence of overheating in the 
UK economy. Sentiment was 
add ition ally unsettled by the* 
emergence of sustained MUfag 
pressure in the gilt-edged mar- 


i 

1 

n- 

Mng IB 

fol 

*te« 

&oO \ 

l«vr - 
Bmv » 

*«a 

l "* ip**" 

•tel* 

tiwso 

* TT «K« W 

Step as 

Oet W 


tees mp Mk 

■ KMIrn 



announcement of Hw second 
quarter gross domestic prod- 


uet(GDP) figure. The 1.3 per 
iiber 


have been undermined by sus- 
tained selling of futures instru- 
ments. 


The FT-SE Index of 100 lead- 
ing shares opened on a week 
note, down some 3X5 points, 
and moved progressively lower 
during the morning trading: 
session. However, after show- 
ing a toss of 19 points at worst, 
the Index rallied to close a net 
14.4 down at 1317.9. 


***** uuvuut 1U V4ur 

ties came in the wake of the 
latest fall in the Dow Jones 
Average and the weakness on 
the Toyko market. 

Selling pressure in London 
was.ndd to be thin - “never 
any more than persistent and 
irritating during early -trad* 
tag”, according to dealers — 
hut gathered pace alter the 


cent rise in the GDP xumu 
was interpreted by one senior 
economist with a leading DEL 
securities house as in d ica ting 
“unsustainably rapid growth”. 
Most City economists had been, 
expecting GDP growth of 
around 1 per emit. 

The GDP aniMmtMwngnt arid 
an erratic performance by ster- 
ling triggered a wave of market 
speculation that another DEL : 
interest rate rise could be on 
the cards. The market response 
was immediate At least two 
major UK securities houses 
were keen seders of an equity 
market which was also said to 


Traders and analysts 
stressed, however, that the 
recent weakness in equities. 
haw *»iwn piaq» against a back- 
ground of appallingly low lev- 
els of business. “These really 
are dog-days; many fund man - 
agers refuse to read anything 
significant into the latest nunn 
hers, and they prefer to wait 
and see the impact of the 
rate rise and the hike in mort- 
gage rates before taking any 
strategic decisions". SEAQ 
turnover yesterday came rat at 
319.2m shares, well up on Meal- 
day’s dismally low figure. HOW- 
ever, fewer than half a dozen of 


the FT-SE 100 constituents 
dosed higher on the day. 

Tim gilt-edged market, how- 
ever, was looking decidedly 
uncomfortable - “labouring” as 
one dealer put it. There were 
ominous signs in the form of 
heavier trading, with one US 
house reporting, “plenty of 
seUing from European sources, 
who are only now beginning to 
display extreme nervousness 
about sterling with the July 
trade figures looming up". 

The opinion in the market 
was that the tirade deficit for 
July could come out on the bad 
side of Elfin. Short-dated gilts 
were down around % whQe at 
the longer end of the market 

faTIn wfamim to 4. 


FINANCIAL TIMES STOCK INDICES 


Aug 

23 

Allfl 

22 

A«0 

19 

Aufl 

18 

Aug 

17 

Year 

Ago 

1088 

High Low 

Sines Compilation 

High Low 

Government Secs 

87.64 

B7ftZ 

87 JK 

87.76 

57.76 

8029 

9143 

(18/4) 

88.97 

(13/1) 

127.4 

(B/1/35) 

40.18 

(3/1/75) 

Find interest 

97.16 

87 M 

97.61 

87 JB 

87.72 

rye aa 

9867 

(25/5) 

94.14 

(W1) 

105.4 

(28/11/47) 

SO .53 
(5/1/75) 

Ordinary 

1480.1 

34772 

1484^ 

14702 

14703 

17805 

1514.7 

(are) 

13400 

(S/2) 

1026.2 

(16/7/87) 

49.4 

<2ftW40) 

Gold Mine* 

194.6 

1943 

1803 

1B7a 

1801 

424J2 

312-5 

(7/1) 

1874) 

(18/8) 

734.7 

(15/2/83) 

435 

(26/10/71) 

OnL M. Yield 
Earning YM Kffull) 
P/E RadotNMAfA) 

488 

11.7S 

1038 

4.62 

1T.BB 

1044 

4.60 

T1.BO 

1048 

4.62 

11^8 

1044 

461 

11^8 

1044 

328 

aoi 

1034 

• 

SJE. ACTIVITY 

Indices Aug IB Aug 22 


SEAQ Barge] ns(Spai) 20554 20077 20955 10,823 10954 33.813 

Equity Turnovor(£m)t - 828.77 844.82 78863 75050 89061 

Equity Bwoainst - 21,7m 21397 21.133 21.029 45.993 

Sham Traded (ml)t - 234.6 328JB 3123 267.0 3013 


•Opgnog *10 ul 
14665 14666 

DAY’S HIGH 14606 


611 an. *12 pot #1 ul 
14663 14626 14636 

DAY’S LOW 1462.1 


• 2 pm. 
14646 


• 3 pm #4 pm. 
14642 1406.1 


Gilt Edged Bargains 
Equity Bargains 
Equity Value 
5— Day average 
Gilt Edged Bargains 
Equity Bargains 
Equity Value 


96.1 

141.1 
1268.9 


1033 

tVL5 

1707.6 


104.1 
1408 
141 93 


1053 

144.4 

14173 


Basle 100 Govt Sees 15710/26. Fixed bit 1028. Ordinary 1/7/35. 

Gold Mines 12/WS5. SE Activity 1974, * NH 1027 t Excluding intra-market 


• London Report and latest 
Share Index; Tel. 0398 123001 


Doubts 
on leisure 
offer 


jMS«'8hanrsi Index 


SEAQ 


Turnover by votwna (mWon) 


AN ATTEMPT by Pleasurama, 
■' the leisure group, to steal the 
thunder of bidder Mecca Ld- 
sure back-fired yesterday when 
its half-year figures failed to 
> inspire. The shares closed a 
penny down at 24%) as volume 
slowed to a trickle. Pleasurama 
was apparently trying to 
- ' upstage Mecca whose delayed 
revised bid terms and formal 
‘ offer document were thought 
immine nt 

Pleasurama’s profits of 
£22£m were 38 per cent better 
than last year, with all divi- 
" sious showing growth. Mr Roy 
Owens, leisure analyst at bro- 

- ker Kitcat & Aitken, is fore- 
casting £63m for the whole 

,«• . year, potting Pleasurama on a 
p/e ratio of Just over IS. After 
. meeting with the company yes- 
’7~ terday, he noted, “We will need 

- Mecca's revised terms before 
we can work out any implied 

T" earnings dilution for Mecca. It 

- is hard to see how the bid for 
Pleasurama can succeed." 
Mecca shares dosed down 2 at 

ir I98p. 

Analysts were agreed that a 
credible counter-bidder might 
... yet appear, but as one com- 
mented. “on the basis of its 
figures and growth prospects, 
. — — Pleasurama deserves to remain 
independent for the moment." 



1930 3 


.Aug 


Aug_ 


China Clays higher 


The disclosure that Brieriey 
Investments has taken a 424 
per cent stake In English 
China Clays (EEC) drove the 
shares higher as the market 
assessed the longer term impn- 
cationsof the move. 

The shares stood out a g ains t 
the generally dt*h backgjronnd 
with a rise of 18 te 477P, after 
touching 485p at best. Trading 
volume at 4.6m shares was well 
above average for the sto ck. 

Analysts and dealers con- 
sider ECC as now being “in 
play" as a takeover target, bat 
expressed doubts that the New 
Zealand group would make a 
full offer. Brieriey la well 
known for taking strategic 
stakes in major companies as 
an investment. RTZ and Ban- 
son head the short Ust of possi- 
ble predators for ECC. 

Bryant Group, in which ECC 
was left holding a stake of Inst 
over 29 per cent after an mbor- 
five hid for the company, edged 
up 4 to 142p. One sugg e stio n 
was that EEC may return with 
a fresh offer for Bryant In 
order to stave off possible pred- 
ators. BZW. the securities 
house, t hinks there is consider- 
able upside potential in ECC 
shares, which optimistically it 
values at 750p, depending an 
the group’s day reserves. 


Taylor Woodrow up 

Interim figures some 60 per. 
cent higher at £34m pre-tax 
compared with £2L2m from 
Taylor Woodrow, came at the 
top end of analysts* estimates 
and were well rece iv ed by the 
market In another day of low 
volmnes^ome l.6m Taylor 
Woodrow - shares changed 
hands with the price resisting 
the general downwa r d trend to 
close near the day's best of 
563p,up& 

BZW, the securities house, 
has upgraded its fhQ year pre- 
tax profits forecast for the 
group from £9k5m to around 
£lOQm. SBGE Savory IflQn is a 
little more conservative with 
its estimate of £95m. 

BZW believes that any signif- 
icant share price improvement 
in the short-term is largely 
dependent on interest by P & 
O, which recently purchased a 
stake of &5 per cent in Taylor 
Woodrow, giving rise to specu- 
lation about the possibility of 
an o u t righ t bid. 

.International stocks were 
‘ redeemed by a minor rally in 
afternoon trading, but. still 
passed a miserable day as deal- 
era worried about Interest 
rates. Ebons hogged the lime- 
light, feffing 7 to 238p as 4.8m 
shares changed hands. Dealers 
said a line of LSm shares had 
beep offered early an -a flurry 
of trading saw JLS m s h a r es go 
throilghTbe system in a 10 
minute period before 9.00am. 
with the l.Sm-block sold at 
well below the prevailing price. 
The auction of the ADR mode 
equivalent of the rights issue 
took place in the US: the nfl- 
paid shares fell to a 34p pre- 
udum, down 6, in London. 

IC1 announced the likely sale 
of its Silicones business to 
French chemical company. 


Rhone Poulenc. In lacklustre 
trading of less- than 600,000 
shares. Id fell 8 to 1007p, after 
bottoming out at lOQJp earlier 
in the day. Glaxo retreated 4 to 
seep. 

Hanson traded quietly before 
today’s figures. Dealers said it 
was depressed slightly by the 
wider market Warburg Securi- 
ties is forecasting £590m for 
the first 9 months. . 

Although oil shares followed 
the market, trend to dose with 
small losses, there were signs 
of selective interest by the 
major securities houses. With 
shares in British Gas doe for 
listing in Tokyo next month, 
the stock continued to trade 
heavily on the Inter Dealer 
Broker screens as marketmak- 
ers prepared themesleves for 
what they hope vriU prove an 
increased demand from Far 
Eastern investors. 

Kleinwort Grieveson, the 
London securities house, has 
posted a strongly bullish circu- 
lar on Gas to its Japanese cli- 
ents, describing it as "one of 
the cheapest stocks in the Lon- 
don market”, and drawing 
attention to its property and 
upstream Investments. How- 
ever, the shares slipped VA to 
lfiOp. 

North Sea stocks showed fit- 
tie reaction to reports that 
they will shortly be forced to 
spend heavily on safety fac- 
tors. The industry Is unlikely 
to be perturbed by the sugges- 
tion of an overall cost of £200m 
on new safety valves, accord- 
ing to one analyst 

With the recent rise in Lon- 
don money market rates put- 
ting pressure on earnings of 
the banks, there were minor 
losses all round the banking 
sector. Turnover was thin, 
however, as Lloyds (30Qp), Bar- 
day»<406p) and NatWest (538p) 


NSW HIGHS AND LOWS FOR 1088 


(Me. Herts 


A Anwio. wan BMn. srosn M OMCS 
S tages "oVGrate M i U w wt . Uneny. 
auKTMCMJl « FmWm. iwm Stem. 

Hoakyn*. P«0D HMD*. W.V M f m KuT. 
ufq Ramktte KLSJ. 


rssu— « OIRtStMtL 

Fla. FNFC Mpc Of. Rd. PL, WtetMfn. 

— i MMBg 09 R«dhM»tf Op. TVpa. Whtd 
— ■ . ntMt (O MalMt, Sodtti petK) 

l, ELECnUCALS P) Rodbne. 
I (I) TACE FOODS (t) 


A, Wvat, White*, 1 


NWlWUnOmMIAnMlW 
De La RufcCMera DO. Eng. Chine Clam, 
Homey, Mmir Howard. MMJMNGB 0Q 

AiMricn (ten. Ch*. Llnootn ML, UOyte 

TMmsmoa, LBMKn Barr WAT. Saga 
ama,wntwnftiMMWiM.Mi« 
1H0HJ. W gWSF AFB HS roEwroBwnay Ptwi. . 
MfW nr FKB. Mora Often**. lUwr 
Waiter. PROftWTT D) BrooWnxxax, 
aMFFMO (1) ToraMi taBJIMO CO ■ 


DanMa (SJ, M0U8TMALS (■) Baar Brand 
Wii mx . Faadax Agrtcu JA Fatboton. 
Maan E Za. Lawton MX. Tboarntt T-Una, 
MEWBTAKin <0 PortMMMJttl & SUNL, 
FAHKI p} BnmntaB On*. SufeM Upa 
CM . «. Sam Cowed*. Fdoranv w Hwitne 


neufbi 


A Daw. MourtBalqh. Do. 5*«pc PI. 
«b Eat. epc Maos. Twmua (i) 


“WMA T * u «» m *S SXtSS C l 


AW nw. ClayM nobafO. OlLsmtaohrt 
MB.RN.ruimTiM<aMatai 


. . Harriaw M^r. 
00 CHA. Bnparar Mnaa. 


PA, OiM Health Wim, l 
Lands. Oama Am. Btdaxmar. KakuxL 
Tmmaod, NsL Hons Ln. 7 *2 pc Ov. ft. 
OU CO HanMnq PA. M WI (4 MoFMey 
Had Laxa, Tlwee Use. 


all gave up a few pence. 

A sharper fall m Standard 
Chartered (Slip) continued to 

indicate underlying worries 
about the promised rights 
issue, which has yet to hit the 
market. 

Brewery stocks were reason- 
ably steady in a nervous mar- 
ket as investors respected their 
defensive dualities. W«h Dis- 
tillers ran 9 higher to 885p 
despite the statement from Per- 
nod-Ricard Indicating that it 
has not purchased a stake in 
the beleaguered Irish gr ou p 
and has no intention of playing 
the role of white knight. 

Whitbread “B" shares 
gained another 25 to 675p, after 
700p, ftwM a Hintinning short- 
age of stock. By contrast, nor- 
land fell back 15 to 648p as 
interest faded. 

The English China Clay 
developments directed atten- 
tion towards De La Bue. where 
Mr. Robert Maxwell holds a 
stake, and amid a flurry of 
activity the shares rose 15 to 
491p. 

Hiowden Group eased 5 to 
119p as Weir Group and J. 
Rothschild Holdings reduced 
their joint holding to 7.83 per 
cent, but A. Cohen hardened to 
1050p on news that GMF 
(Investments) had increased its 
stake to just over 7 per cent 

Nervousness over the pres- 
sures for higher interest rates 
as a means of curbing con- 
sumer spending again lay 
heavily over the stores sector. 
VR Smith, at 267p, shaded by 
a few pence despite recommen- 
dation as a “long term boy” 
from Morgan Stanley. Only 
141,000 shares in the book 
retailing group changed hands, 
an Indication of the absence of 
g w i ui ne investment interest in 
the market. 

Among the High Street 
majors, Marks and Spencer 
drifted down to !6 5Mp. Recent 
support for GUS "A" shares 
slackened, leaving the shares 
at I062p. Sears, a&2L7m shares 
traded, held at around I40p 
•with dealers still seeking the 
identity of the recent buyer. 

There was little action in the 
electronics sector - Hoare 
Govett, the UR securities 
house; warned clients against 
Siren calls for a general re-rat- 
ing which it considers unjustif- 
ied. 

Ferranti slipped 4% to 93V*p 
as the market continued to 
mull over last Friday's major 
presentation in Edinburgh. At 
163p, Flessey gave back some 
of the ground m qdft on Mon- 
day. County NatWesfs sector 
analyst, Mr John Tysoe, 
pointed out that Plessey is 
teamed with American Texas 
Instruments for a share of the 
US Nato Identification System, 
a programme worth a potential 
*5bn. 

Despite the generally favour- 
able view of the marketplace, 
RacaJ (316p) followed the gen- 
eral trend to dose eerier. Trad- 
ers ascribed tins to profit-tak- 


APPOINTMENTS 


Taylor Woodrow’s three 
managing directors 


TAYLOR WOODROW has 
lted three joint managing 


main board to January 1964. 
Be is chairman and managing 


Mr Peter Hedges was made a 
director in November 1906. % 
joined Taylor Woodrow Prop- 
erty Company in 1066, and 
became managing director in 
1977, ids . present post He is 
also a director of Taylor Wood- 
row Developments, president 
of Taylor Woodrow Property 
C o mpany of America Inc., and 
chairman of Taylow Woodrow 
Property Holdi n gs Pty of Aus- 
tralia. 

Mr Walter Hagbin joined the 


director of Taylor Woodrow 
International. He joined the 
group in 196L 


Mr Tony Palmer 
appointed to 13ms board In 
1964. and has been a joint man- 
aging director of Taylor Wood- 
row Construction ainceNoveai' 
ber 1986. He also serves as a 
di rector of Taymech. chairman 
of Taylor Woodrow Manage- 
ment Contracting, and a non- 
executive director of St Kathar- 
ineby-tbe-Tower. 



Top posts 
at National 
Mutual 


AS*' 


■ Mr WaM»P.*^Mm^who 
has been with N ATION AL^ 
MUTUALUFE ASSURANCE 
SOCIETY. Httchen, 
Hertfordrirfre. . duse 

kMM .mviMmI urtimivand 


in vestment manager with 
yM pnrwlWHty far gB li DiU tet 
anci stockmarket investment*. 
Be previously held the posts 
of Far Eastern flmdmannggr 
and fixed intspart ma nag er . 
Mr Paul Downey ha* been 

appointed deputy actuary* 


HENRY BARRETT GROUP has 
aw i pfthitaH Mr hxwm AudOMUI 
Lfehove) as wwiMgiwg director 
of Its rifau 

skm. 1 


Mr PhJBp Hawthorne (above) 
>hm become ftmu* n4 plan- 
ning director ef GOLA LABEB. 
Be was a management consul- 
tant with Price Watezbonse. 


He 


deputy — r — 

is also on the board « a®™*™ 
subeBlariiBB. Mr-ym MD h^ 
w m m# tWu burul mVflnjXfflXXk 


m Mr Trevor Davies haa been 
stmointed a director of . 

. oNome photographic 

PRODUCTS to head the new 
Iriaure divhdun. Be was a main 
board director of the Thomas 
Cook Group. The oosej^y is 
(ring ini name to Nbbie 


who has been with the Society 

for as years, tobeen - 


a WAHDLE STOREYS, 
succeeding Mr E.V. Tbompsoa 
who has resigned. 

■ MgC^rMttattj -to s been^ 

Byfleet. Surrey, a ^edahst 
health products retail chain 
owned by Booker. Be was 
ia«yfQ qa iy in ajM m fng director 
of Candour, and since 1984 
sales operationsdirector of 
Currys, part of the Dixons 
gmv. . 

■ MBCorinneMierbnthas 


SHANDWICK EUROPE. He 
founded the Leslie Bishop 
Group, which became part of 
the Sbandwick Group In 1986. 
■ Mr Alan GTOwe has been 
appointed director and general 
manager ofCHAKBONNEL 
ET WALKER, Tunbridge 
Wells, a wholly -owned 
subsidiary of Barker A Dobson 
Group. He was founder and 
manag ing director nf 

Cromweu’s Chocohdters. 


■ Mr Bhdse Hudaren bus 
been appointed a director of 
MURRAY INCOME TODST. 




■ Mr DJ. Payne hashes 


, as a director. She 
wasadiroctorofKIiby 
ProfesrionaL s v; 

■ Mr Leslie Bfrinbp has been 

aj^winted a dfrectoa: of 


■ Mr Hazzy Groan, formerly 
operations (Hrectorttf AEtna 
International, has been 
appointed nan-executive 
director af GROUP ALPHA. 


joins tiie board of Pngh 

CW"riffhiiri r 


tn g anil pmininwl K nltid i of fha 


TRADING VOLUME IN MAJOR STOCKS 


Evans Halshaw, the mnlti- 
franchised motor distributor 
based in BIrmingam, produced 
mid-term profits well up to 
expectations and on target for 
fan year estimates ranging to 
flOm. Mr Keith Williams, sec- 
tor researcher at BZW, is an 
advocate of that figure and 
recently advised clients, "the 
shares offer considerable 
upside potential once the the 
rights issue has been digested 
by the market". They edged 
forward again yesterday to the 
year’s highest of 348p. Jaguar 
were thinly traded again »nd 
eased to 271p. 

WnfifioB 6 MurfJtmrt fell 13 tO 
247p after announcing Its 
£L3j6m offer for Catalyst Com- 
munications. Catalyst shares 
resumed trading to dose at 58p 
compared with last week's sus- 
pension price of 52p. 

Leading Properties put up a 
more resilient performance. 
Although the tone overall 
remained duTi business even- 
tually became more evenly bal- 
anced and Land Securities, 
down to 548p at one stage, 
picked up to finish only 3 off 
on the day at 552p. British 
Land settled only a shade 
lower at 330p but Greycoat 
encountered further selling 
pressure and fell 8 to 411p. 
Kentish Property, which has 
arranged a £24m re v olvi ng loan 
fedtily with Security Pacific 
Merchant Bank to finance its 
residential development in 
London’s East End, eased 4 to 
141p. 

The two Tobacco majors 
gave ground with BAT Indus- 
tries closing marginally softer 
at 428p ahead of today’s dead- 
line on the conditional offer of 
$72 per share for Fanners 
Group of the US. Rothmans 
International encountered 


The following B toed on trading ftrinw for Alpta securities dealt through the SEAQ system yesterday until 5 pm. 


Sunk 



toUf- 


oah 

no 

w 

ns 


fita 

£U 


to* 


SCO's 




Mne Onlq 
OOD'i Me 


BVi 


Cmurn 

mSUbIm™ 

FBfitadk 40 

flam 4M 

CaeuacdM at 

CantOd. 2£00 

urn 



Ua/Snrhia. 

un«. 


COeiWMa- _ 

S SET*- ** 

hMudiUMw— 294 



1300 

135 

toltfaraf 5D5 

ase= ^ 

iMtbe 7J0I 

leas DO 

HOT 42b 

Hatatsm — 1700 

UmtoM 7ZJ 

Urol Bo UU 

BMSadBat 427 

■xWcaBat LUO 

*ea IjBO 

■aOn Foods M 

Pens* 70 

MrlOag 197 

P&B <12 

ftktapo 1.400 

FVKJ 1.400 

PndmlM 1.0S9 

toad u» 

b*H 182 

me » 

RW IXS 

tettUbta— » 

todM 745 

Radix), m 

Rates V 514 

BIZ L«l 

(Mw S» 


552 -3 
410 -b 
316 -4 
300 -8 
416 -3 


547 -4 
527 -4 
166 -1 
205 -3 
232 -4 
41# -3 


fettaMSY 5U 436 

IBJttSanbed UB 355 

ilhanxe J77 395 

633 281 

SUtaJSnt*)— in 363 

3M 215 


-4 

-3 

-3 

-Z'z 


ScMfifenasde- S4» ^ 


San.. 


yoo 

SUTqM 43b OOk 

SOI 362 37V 

SngbEaais 351 301 


538 -7 


230 -3 
2fll -3 


74b 

470 


58 -3 
-1 


StiUlfcsfex — uoo 

JuMQAi 
SoR6ns_ 

UN 

158 


137 


117 511 

3,900 232 


199 968 

96 181 


bn. 


18 -1 
161 


Ut&qk. 


IMS 105 
671 239 


407 842 

2,®» 144 


316 -3 


70S 

475 


422 tf 
921 -5 
417 42 
436 -4 
<77 -6 
445 -2 
137 -i 


nonOB 623 649 

TrabiivHN* 521 311 

TnotafFortt 885 248 

mnov 1,«S 267 

Wfaer m 445 

DMtdBtttt 297 282 

MbdfcK. 57 420 

Wrfcont 726 504 

retta*"*- 830 299 


wnmbUto— M»0 292 

Wqq UOO » 

Wwmrtb 591 Z74 


t 

4 


occasional sales erf a profiMak- 
ing nature and lost 4 to 4S6p. 

Courtanlds went the way of 
most Alpha stocks, losing 6 to 
336p, while Dawson Interna- 1 
tional eased to 213p after BZW 
shaved its forecast of current 
year profits. The new figure of 
£5Z5m is still above most other 
estimates and particularly 
Hoare Govetfs £48m. Dawson 
has sold Animal Fibres 
(Bradford) to Mr Tom Ross, the 
present managing director, and 
Mr Mike Adams. Animal 
Fibres’ merchant -like business 
fails outside the mainstream of 
Dawson’s operations and its 
disposal is a continuation of 
the group's policy of focusing 
resources more sharply on its 
core activities. The consider- 
ation represents less than 1 per 
cent of the group's net assets. 

Miscellaneous financial 
issues reporting six-month 


profit statements suffered con- 
trasting fortunes. Templeton, 
Galbraith & Hansberger, the 
US-based fund management 
group, revealed earnings down 
on the previous year, but 
above market expectations and 
the shares held their ground. 
The news elicited comment 
that the group and Mercury 
Asset Management (MAM) 
were the two quoted concerns 
with the highest quality of 
earnings, and best ability to 
withstand troubled markets. 
MAM shares subsequently rose 
16 to 340p. 

Ex-land’s interim results 
were decidedly less favourable. 
A warning about the dividend 
payment n the adverse tr ading 
conditions continue, which 
seems likely , saw the shares 
dip 11 to 36p. First-half revenue 
was down from £91,400 to only 
£7,300. Frost Group, the petro- 


leum products retailer to finan- 
cial services group, made scant 
reply to increased half-yearly 
figures plus an optimistic view 
of prospects for the remainder 
of the year. 

A slight improvement in 
turnover In the Traded Options 
market showed some 15,154 
calls and 8,601 puts transacted, 
giving an aggregate of 23,755 
contracts. There was a sharp 
improvement in business in 
the FT-SE index with total 
turnover of 4,428 comprising 
2,241 calls and 2487 puts. Trust 
House Forte included a major- 
ity of puts- L200 - and only 835 
calls. There were 1,630 calls 
and SO puts in BP while Sears 
showed 1,675 calls and 69 puts.' 


■ Other market statistics, 
including FT-Actuaries 
Share Index and London 
Traded Options, Page 80 




Anglo American Industrial Corporation Limited 

.v iocoipcx3<c^te_lbelteput^crfS<^lhA&ica^O3ii^ianyReglEti/US<xiNq.G3AS282l06.. . 





■■il ■ n f ni Meniwl 

Ullillll itpOTl 

The fbflowfag are the unaudited financial results of ihe corporation and its 
subskSarfes far the six months ended June 30 1988, tocher wfth 
correspaufing figures far the toe months ended June 30 1987 and die year 
ended December 31 1987. These shouk! be n^m conjunction with Ihe 
notes below: 

Six Six 

months m o n ths Year 
ended ended ended 
50&88 306.87 3LCL87 

RmUUoa R million R million 


Earnings &oni operations 

Share of earni^s of associated companies 

Dividends 
Rptaffwl C^HHD£S 

lnciQfl y* Oum mvcstmoits sod 
Merest earned 


Finance tease charges 
Interest paid 


Earnings before taxation 

Taxation 


Earnings after taxation 

Otaside shareholders' intetest to earnings 

of subsidiaries 


SWwlwy nttrO m t ahlr m ordinary 


Number of ottfinaiy shares in issue (POO) 
Earnings per ordinary ahare* —cents 
DMdends per ordinary share - cents 

Inte rim 

Final 


fnr pgriorT — P milTion 

RnjflBon 

Group capita) emptejed-RmilHon 
Gnwp borrowings- Rmdfion 
*Based on weired average number of 53 622 150 ortfioaiy shares in Issue 
tor tbe period. 


2123 

1681 

3546 

S45 

212 

473 

88 

63 

164 

43 

36 

63 

45 

27 

9l!i| 

44 

54 

69 

477 

329 

70S 

38 

37 

74 

29 

54 

40 

67 

91 

114 

410 

238 

IMfvEl 

135 

52 

127 

275 

186 

465 

74 

54 

1)9 

201 

132 

346 

53685 

50828 

53600 

375 

253 

663 

85 

65 

225 

85 

65 

65 

— 

— 

160 

122 

89 

178 

339 

80 

107 

4412 

4095 

4126 

1036 

1312 

1 122 


L Dinngthe six months hi June 30 1988 an additional 84518 ordinary 
shares hi the capita! of the corporation were issued in terns oflbe Anglo 
American Group Em plo y ee Shareholder Scheme and fai terms of the 
corporation's Share Incentive Scheme tor senior executives. 


da d osed fa Hie latest annual report. 

3- At June 30 1988 all foreign currency loans taken up by Antic's subskfiary 
compa ni es were falfrcxH«edty forward exchange conOacts. 

4. fa tbe period under review, rhe group has brought to account 
extr a on toa iy charges of R22 roBlion Ota7-' RO- 9 ndlHoa). These relate to 
the port’s share of extraordinary losses in subsidiaries and associates. 

5. ^ The taxation rharff? irichxtes deferred tax prowsicins of R98mflBon 
(l987:R23maikxO. 


6L The South African economy performed strongly during the Bret half 
although the greatest demand was concentrated in consumer related 
products whilst growth in new capita! investment remained unsatisfactorily 
low. The strong resurgence in world metal and commodity prices, 
atxompanied by a progressive depreciation in the rand, benefited most 
subsidiary and associated companies with notable performances being 
recorded fayHighveld, Mondi and Boait As a result, attributable earnings 
per share have increased by^ 48 per cent as compared to die same period in 
1987 and the interim dividaid has beat increased (o 85 certs per share 
(1987: 65 cents). Earnings lor foe year am expected to show a significant 
improvement ouerl 987 although second half results will be progressively 
affected by a dedine in the rate of growth in the South African economy 
fallowing tt*o imposition Of tigtuer credit conditions and hightr ini port 

surcharges. 


For and on behalf of the board 
WGBoustred. Directors 
LBoyd 


Interim dhriftend No 49 


On Thmsday, August 18 1988, the directors of the corporation declared 
interim dividend Na 49 on Ihe ordinary shares as follows: 


Amount (South African currency) 

Last day to register for dividend (and for changes 
ofadebess or dividend instructions) 


85 cents per share 


Friday, September 16 


to (inclusive) 

Ex-dividend on The Johannesburg Stock Exchange 
and on The Stock Exchange - London 

Cunency conversion dare for steifing payments to 
shareholders paid bom London 

Dividend warrants posted 
Payment date of dividend 
Rale of non-resident shareholders' tax 


Saturday, September 17 
Saturday. October 1 


Monday, September 19 


Monday. September 19 
Thursday. October 20 
Friday. October 21 
15 per cent 


The fttil contfitions relating to tbe dividend may be inspected at the 
Johannesburg and London offices of the coipoiattcin and its transfer 
secretaries. 


By order of the board 

Aggto American Corporation of South Africa Limited 

S e c r etaries 


perDJABson 
Divisional Secretory 


Transfer S ec retaries 

Consofidated Share Registrars Limited 

1 st Floor- Edina 

40 Commfssfoner Street 

Johannesburg 2001 

(PO Box 61051 Marshalltown 2107] 

South Africa 


Registered Office 

44 Main Sheet 

Johannesburg 2001 

(PO Bax 61587 Marshalltown 2107) 

South Africa 


H31 Samuel Registrars limited 
6 Greencoat Place 
London SW1P 1PL 


London Office 

40Holbom Vcm±uci 
L ondon BC1P 1AJ 


August 19 1988 


(sQSKs 

















_'_•- O 'SV. 


• . . .• j 


FINANCIAL TIMES 


WEDNESDAY AUGUST 24 


19S8 


COMMODITIES AND AGRICULTURE 


Shell forecasts a bleak 
for oil prices 



By Steven Butter 

NOMINAL OIL prices are 
unlikely to rise higher than 
current depressed levels until 
well into the next decade, 
according to Mr John 
Jennings, a group managing 
director of Royal Dtrtch/ShelL 

The forecast, made yesterday 
at the Offshore Northern Seas 
conference in Stavanger, 
Norway, was regarded as the 
most bearish yet delivered by 
the international oil group on 
prospects for oil prices until 
the end of the century. 

Oil analysts said they could 
not recall any leading oil 
company painting such a stark 
picture of the future. Many in 
the industry have been 
expecting substantially higher 
prices well before the middle of 
the next decade. 

However, cheap oil helps to 
con tain inflationary pressures 
and would benefit ail- 
importing countries. 

In money-of-the-day terms, 
oil prices would continue to 
fluctuate in a range between 
S10 and $20 a barrel, implying a 
decline in real oil prices. 

Mr Jennings said that even 
this assumed a modicum of 
unity and discipline by the 


Organisation of Petroleum 
Exporting Countries. 

He warned that recent 
acquisition and exploration 
activity in the industry 
appeared to reflect an 
unwarranted optimism about 
the strength of oil prices. 

Shell now believed that 
world demand for oil was 
unlikely to g tow significantly 
during the rest of the century. 
* Mr Jennings said economic 
growth in the developed world 
was now unrelated to growth 
in oil consumption, while 
investments aimed at 
increasing energy efficiency 
were accelerating. 

Although demand was 
picking up in developing coun- 
tries, particularly for transpor- 
tation fuels, it was unlikely 
that a worldwide recession 
could be indefinitely post- 
poned, thus allowing little 
scope for sustained growth in 
demand. 

Oil production, however, was 
likely to continue at today's 
robust levels. 

Mr Jennings said the high 
levels of investment in oil pro- 
duction now being made in 
non-communist countries 


which were not members of 
the Opec meant output was 
unlikely to decline at least 
until the end of the next 
decade. Non -Opec production 
has grown rapidly in the past 
10 years, to about 27m barrels 
a day. 

Mr Jennings said such 
factors put Opec into a difficult 
position and postponed the day 
when it would control enough 
of the world market to dictate 
prices and do away with its 
quota system, which produced 
strains among Its members. 

He said: “The ceasefire 
between bran and Iraq. . . may 
improve prospects for Opec 
cohesion but seems more likely 
to add to world supply rather 

than riimintah it." 

He added that recent moves 
by Opec members - inpJndmg 
Saudi Arabia, Kuwait and 
Venezuela - to acquire refin- 
ing and marketing capacity in 
oil-importing countries would 
add to the tendency for weak 
prices. 

He said the oil industry 
would have to cope with the 
difficult price environment by 
continued technical 
innovation. 


Brazilian ‘gold-rush’ drives 
output up 24% to record level 


By John Barham in Sao Paulo 

ECONOMIC DISARRAY is 
fuelling something of a gold- 
rush in Brazil as savers battle 
for protection against runaway 
inflation and political 
uncertainty. 

The country's gold output 
rose by 24 per cent last year to 
a record 84 tonnes, says a 
report issued by Consolidated 
Gold Fields and Ourinvest, a 
leading Sao Paulo gold dealer. 

Mr Ricardo Eichenwald, a 
partner in Ourinvest, said: 
“Demand for gold in Brazil has 
always been strong and has 
always increased. What 
happened last year was that 
the trend suddenly picked up.” 

Mr Peter Rich, a gold 
analyst, forecast that Brazil 
could become the world’s 
second-largest supplier by the 
turn of the century as output 
fell in other countries. 

However. Ourin vest’s report 
said economic instability and 
the exhaustion of dozens of 
producing regions made 
detailed forecasting hazardous. 

A frenzied search for a hedge 
a gains t inflat ion, now running 
at 20 per cent a month, has 
powered Brazilian demand for 
gold. Ourinvest says gold 
investments doubled last year, 
to 41 tonnes. 

The report said multi- 
national companies, which 
have to make regular currency 
remittances, have bought the 
most gold. Last year they 
raised their holdings to 23 


Gold Mine production 


Brazfl (tomes) 
100 


Mattel shares o* non-c ommu nist 
1,370 tonnes) 



1981 83 85 87 


9Du^;a*eianUI«MnHaSoaindOBtiBMMt 


tonnes, up 248 per cent from 
1986. 

The Central Bank also 
resumed aggressive buying 
after the country suspended 
interest payments on its 
$121bn (£72bn) foreign debt 

It increased its gold holdings 
last year to 22 tonnes, from 
nine tonnes in the previous 
year. However, its gold 
reserves were still well below 
the 38 tonnes it built up in 
1983. 

Consolidated Gold Fields 
says the bank sold a 
substantial portion of its gold 
reserves at the year’s end. The 
bank would not confirm the 
sales but operators suspect it 
sold to profit from unusually 
high prices at the end of last 
year. 


Widespread smuggling 
means output figures are 
speculative at best Ourinvest 
says half Brazil’s 84-tonne out- 
put went unreported last year. 

The county’s lm gold, 
prospectors are the main 
source of smuggled gold. They 
produce 70 per cent of Brazil’s 
gold and claim they produced 
96 tonnes last year, a figure Mr 
Eichenwald dismissed as 
hopelessly inflated. 

However, brokers said they 
had noticed a fall in smuggling 
as local prices rose above the 
international market 
.• Outokumpu, Finland’s state 
mining company, will mine 
gold from its Saattopora 
deposit Lapland, from next 
January or February, Reuter 
reports from Helsinki. 


Al uminium 
capacity 
forecast 
to rise 

By Our Commodities Staff 

THE International Primary 
Aluminium Institute expects 
that by June 1991 non- 
communist world output 
capacity for aluminium and 
alumina will rise by 

740.000 tonnes and 1.71m 
tonnes respectively. 

Its estimates suggest annual 
primary aluminium output 
capacity will reach 14.41m 
tonnes, up from 13.G7m tonnes 
at the end of last June, mainly 
reflecting rises in Latin 
America and Asia. 

In the period rises fax Latin 
America and Oceania are 
predicted to lift al umin a 
capacity from 32J7m tonnes to 
34.68m tonnes. 

Alumina output rose to 
7.25Sm tonnes in this second 
quarter, from 7.110m, com- 
pared with 7.082m tonnes in 
the second quarter of last year. 

In this second quarter there 
was a net flow of 12,000 tonnes 
of aluminium from communist 
to non-communist countries. 

Exports to communist 
countries totalled 2,000 tonnes, 
against imports of 14,000 
tonnes, bringing total 
movements so far this year to 

7.000 tonnes and 20,000 tonnes. 

WEEKLY 

METALS 

AD prices as supplied by Metal 
Bulletin (last week’s prices in 
brackets). 

ANTIMONY: European free 
market 99.6 per cent, $ per 
tonne, in warehouse, 2400-2450 
(same). 

BISMUTH: European free 
market, tutu. 99.99 per cent, $ 
per lb, tonne lots in warehouse, 
5-95-&05 (540-6.00). 

CADMIUM: European free 
market, min- 99.5 per cent, $ 
per lb, in warehouse, ingots 
740-740 (740-7.70), sticks 740- 
740 (740-7.70). 

COBALT: European free 
market, 994 per cent, $ per lb, 
in warehouse, 645-7.10 (645- 
7.05). 

MERCURY: European free 
market, min. 9949 per cent, $ 
per 76 lb flask, in warehouse, 
315-325 (same). 

MOLYBDENUM: European 
free market, drummed molyb- 
dic oxide, $ per lb Mo, in ware- 
house, 3.42-340 (3.40-340). 

SELENIUM: European free 
market, min 994 per cent, $ per 
lb, in warehouse, 9.65-9.75 
(same). 

TUNGSTEN ORE: European 
free market, standard min. 65 
per cent, $ per tonne unit (10 
kg) WO, Cif, 51-59 (51-58). 

VANADIUM: European free 
market, mm. 98 per cent, VO, 
cif, 5.10-5.60 (same). 

URANIUM: Nuexco 

exchange value, $ per lb, UO, 
14.75 (same). 


Hopes rise for 

Chris Sberwell on the load borne 


Australian coal 

by a troubled industry 


A N AIR of nervous 
/ \ anticipation, not to say 
x X hope, has appeared in 
the troubled Australian coal 
industry recently, and the next 
few weeks should determine- 
whether it is justified. ■ 

Most keenly awaited is a 
decision from the Coal 
Industry Tribunal. The 
tribunal has been trying to 
arbitrate a difficult, costly 
dispute between the mining 
companies and unions on more 
flexible working practices, in 
particular on ending the five- 
day working-week and lengthy 
Christmas shutdowns. 

Also to be announced is the 
outcome of protracted talks on 
steaming-coal contracts with 
Japanese utilities. This market 
represents about a third of all 
Australia's steaming-coal 
exports, and hopes are high for 
a jump in prices after a long 
period of weakness. 

Then there is - the 
Government’s formation of a 
coal marketing and technology 
council to advise it on export 
issues. The move, announced 
last week, countered persistent 
union Mils for a national coal 
authority but left the Miners 
Federation unimpressed. - 
Further, changes are under 
way in the corporate 
structure of the industry, with 
some companies leaving coal 
altogether and others seeing 
chances to move in or expand 
their interests. 

The industry is certainly in 
need of good news. Since the 
end of 1986, 20 mines have 
dosed, 17 of them underground 
in New South Wales. A total 
3,500 jobs have gone, more 
than n per cent of the total in 
the whole country. 

Industrial relations have hit 
an appallingly low point. 
Working-days lost in the 
coalmining industry are 
running at more than 40 times 
the national average, after a 
national strike last year and 
another two this winter. 

The gloom is in sharp 
contrast to notable facts about 
Australian coaL The country is 
easily the world’s largest 
exporter, with more than so 


per cent of world trade last 
year. Last year no fewer than 
miw tonnes of 139m tonnes o£ 
output were exported. 

Coal is Australia’s 
second-biggest export after 
wool, earplug about A$5.5b n 
(£2.7bn) a year and m aking a 
vital contribution to c uttin g 
the country’s chronic current- 
account deficit 

Australian productivity, 
moreover, as measured by 
output per manshift is 
actually four or five- times 
greater than in the highly- 
protected Tnirring industries of 
japan. West Germany . and 
Britain. To Australian miners' 
it is ridiculous that their mines 
are dosing. 

That said, the country 
cannot affor d the damage to its 
reputation for delivery caused 
by strikes and stoppages - 
especially when, as in recent 
years, it is tight . market 
conditions which have 
contributed to the Industry’s 
plight. 

The industry has now 
accumulated losses ru n ning 
into hundreds of millions of 
dollars. The low price of coal, 
which has suffered because of 
oversupply and the phmge in 
ofl prices, is only one reason. 

Australia's rising costs and 
high inflation rate compared 
with those of competitors have 
also eroded its competitive 
position. Even the benefits 
conferred by the ■ weak 
Australian dollar in 1985 and 
1986 have been erased by the 
currency’s strength this year. 

It is the combination of these 
factors which is forcing 
the industry to undergo 
restructuring. The companies 
have tackled the problem in 
two areas.They want: 

• Big reform of outdated work 
practices by the mine unions. 

• Cuts in freight, royalty and 
other charges levied by federal 
and state governments. 

The tribunal’s findings are 
therefore critical. It is certain 
to order changes in work 
practices. However, the mining 
companies worry that an 
attempt to arbitrate the 
two positions through 


(Compromise, will not be 
.enough- . 

The issues are sharpest, m 
the underground mine® °* ** 
South Wales. They, having 
grown u n profitable by nu nfo g 


converted rapidly to so-cauad 
longwall mining, that is 
mechanised excavation using 
the longwaBed machine, in a 
change similar in impact to 
containerisation of ports. 

Yet, because of union 
resistance, the new equipment 

is only being used for about 42 

per cent of available time 

The companies now want 
individual miners to work nine 
hours a day, six days a week, 
and the mines themselves to be 
operating seven days a week, 
52- weeks a year. 

From their point of view, 
anything less than a nine-hcwr 
stdftwfll not be wort hwhi le. 
Even an extension of rostering 
arrangements already to place 
in open-caste mines would also 
be too costly. 

The Miners Federation 
leader ship, already so bitter it 
is talking of breaking its 
long-standing ties with the 
Labor Party, is just as 
adamantly refusing such 
changes. The unanswered 
question is whether it can 
carry the rank and file. 

Tbe ontcame in New South 
Wales is also important for 
Queensland, e v en though most 
of the mines there are open- 
caste and operate on a 
different basis. 

Those nringfi also want new 
working practices to help than 
cope with the difficult market. 
In time, they, too, will be 
driven underg ro und. There is 
only one longwall mine in the 
gtfltp but there will be three 
next year and more later. 

However, such changes in 
work practices will go only 
part of the way towards 
helping the companies. The 
companies also want 
alterations to the system of 
government charges. - 

Far example, in New South 
Wales the freighting of coal 
subsidises cheap rail fares 


enjoyed by Sydney’s 
commuters. The companies 
want freight charges cut and 
dances in the way royalties 
are charged. 

The overall aim Is to cut 
coal's costs by about ATW a 
tonne, enab ling surviv ing 
Australian companies to 
reduce debt and compete even 
more strongly against big 
producers Jike South Africa 
and. in future, against cheap 
suppliers like China and 


As for the changes in the 
industry’s corporate structure, 
these have been going <m in 
parallel with the other 
develop m en t s. 

Thus, CSR. one of 
Australia's biggest industrial 
companies, as part of its own 
restructuring sold out of coal, 
mainly to Shell Australia and 
Esso Australia, and out of 
resources generally. ACL taken 
over by BTR Nylex, sold its 
coal operations to Arco of the 
US. 

Recently, Santos, the 
Adelaide oil company, took a 
in QCT Resources, the 
Queensland coal group. 

'Further, earlier this month 
Howard Smith, an industrial 
company with a 50 per cent 
holding in Coal and Allied 
Industries, became the subject 
of a bid from Industrial Equity, 
New y-Miawd entrepreneur Sir 
Ron Brlerley's Australian 
group. Howard Smith Is 
thought to control about a 
quarter of coal output in New 
South Wales. 

Generally the turnover of 
Australian coal assets appears 
to be cutting the number of 
medium-sized companies, 
leaving larger ones and smaller 
ones. 

However, the changes are 
only partly the predictable 
response to prospects for 
changes at home and an 
upturn in the export market. 
They also reflect years of 
exhaustion from battling for 
survival. The next few weeks 
will show whether the long- 
awaited turn round has finally 
arrived. 


Currency ‘havoc’ for NZ wool industry 


GOVERNMENT POLICIES 
leading to high interest rates 
and an overvalued currency 
had wreaked havoc on New 
Zealand's wool industry, Mr 
Pat Morrison, chairman of the 
New Zealand Wool Board, said 
yesterday, Reuter reports from . 
Wellington. 

He said: “High interest rates 
saw exporters TwfnftrriRff their 
stock holdings, while the 
unpredictable New Zealand 
dollar has made forward 
selling virtually impossible. 
This has driven spinners up 
the wall and out of New 
Zealand wools." 

Mr Morrison was speaking to 


the annual meeting of the meat 
and wool boards* electoral 
rfwnTnittee. 

He said said the industry 
needed a decline in the New 
Zealand dollar, now at about 
6340. US cents, to 20 per cent 
below its post-float peak of 
72.45 :ceoti£'. C/.: 1. ' “ -■>: 

However, 'he said be saw no 
early fall of the 
currency, because of the 1 
Government's asset-sales 
programme. - 

Wool export value rose to 
NZ$145bn (£706m) in 1987-88 
(July-June) from NZfl42bn in 
1986-87, allowing wool to 
remain New Zealand’s second 


export, Mr Morrison 


Production was at its highest 
level since 1980-81, although 
the number of sheep fell 44 per 
cent from the previous year to 
64m head. However, the 
board, expected a marginal 
fall' in output : this 
season. 

The average wool price last 
season was 604 cents a 
kQogram (dean). 

Mr .Morrison said 
manutucturers had been driven 
out of export markets and 
skilled wor kers had lost their 
jobs. ■ . 

Manufactured wool exports 


fell to NZ$94.4m in 1987-88. 
from NZ$114. 9m in 
tbe previous year, the 
Wool Board’s figures 
showed. 

Mr Morrison said the Wool 
Board hid on 31 per cent of 
stock at auctions last season, 
as part of its price support 
programme, and bought 
11 per cent, or 173,270 
bales. 

Board stocks stood at 93,395 
bales at the season's end, up 
from 62495 at the end of tbe 
previous season. The holding 
represented about 4 per cent of 
the total dip. 


WORLD COMMODITIES PRICES 


LONDON MARKETS 

ALUMINIUM prices on the London 
Metal Exchange climbed to the highest 
level lor eight weeks yesterday as 
chart-inspired speculative buying was 
backed up by news that Indonesia had 
hailed all aluminium exports pending 
contract talks with Japan. The cash 
high grade prico rose $180 to $2,920 a 
tonne, while the three months position 
closed 590 higher at S2.765. Zinc was 
firm early In the day, continuing its 
upward run, but ran into profit taking 
towards the end of the afternoon. 
Nevertheless the cash LME quotation 
closed £5 up at £803 a tonne. Coffees 
recent rally ran out of steam, however, 
with the November futures position 
ending £18 down at £1.038 a tonne. The 
market had fallen in line with New 
York's overnight trend, but only traded 
sideways yesterday altemoon when 
New York opened stronger. 


SPOT MARKETS 

Crude on (per banal FOB September) 

+ or - 

Duoal 

SI 3.20-0. SSq -0.215 

Brant Blond 

S14.05-4.00y -0.275 

W.TI. (1 pm nil 

S15.B5-5.70q -0.28 

CHI product* 



(NWE prompt delivery per ton m3 CIF) 




+ or - 

Premium Guaollna 

S 162- 185 

+ 1 

Gas on 

5130-132 

-1 

Heavy Fuol Oil 

S60-7I 


Naphtha 

5137-139 

+ 5 

Povoiozm Argus E aim aw a 


Other 


+ or- 

Gold (por troy ozfa 

$432.75 

+ 0.50 

Silver iper troy oi)+ 

675c 

+ 4 

PlBlmum (par iroy oz) 

$542 

+ 5.S 

Palladium (por iroy «) 

$124 

+ 0.5 

Aluminium (troo maikoi) 

S2805 

+ 170 

Copper (US Producer) 

106*3-1000 

+ 26 

Load (US Producer) 

38c 


NrCfcol ifroo mnrfcot) 

835c 

•5 

Tin (European tree market) £44?S 

-IS 

Tm (Kuala Lumpur tnoriiolj T0.58r 

+ C.W 

nn [Now York) 

3446c 


Zinc lEuro Prod. Price) 

51275 


Zinc (US Prime Wastam) 

65SbC 


Cattle (Irvo woigMtt 

114 B4p 

+ 0.11* 

Sheep (dead woighQI 

1G945p 

+ S.44- 

Pigs (live wotgM)t 

67.590 

+0.BS* 

London dally augur (raw) 

$2758 

+ 1 

London dally sugar (white) S2Gls 

+ 2 

Tale and Lyle expert price C273 

+ 1 

Barley (English lood) 

Cite 

+ 1J2S 

Maurt (US No. 3 yoiiow) 

£137-5* 


Wheat (US Dork Northern) 

El 20.25 k 

-1.0 

Rubber (aPOl)V 

72.50p 

-060 

Rubber <Sop)V 

7860O 

-060 

Rubber (Ocu V 

79.00p 

-o.es 

Rubber (KL RSS no 1 Sop) 340 0m 

•1.0 

Coconut oil (PtMlipomo»)S 

$5CSw 

-20 

Palm Oil (Malayslanft 

S420y 

-76 

Copra (Rhllippinepffl 

84)0 

-56 

Sovaboans (US) 

$504 

Canon "A' index 

656c 

-06 

woo) lop* (64s Super) 

©47p 



COCOA E/lonne 



Close 

Previous 

High/Low 

Sop 

899 

880 

899 882 

Dec 

870 

872 

875 863 

Mar 

8S8 

859 

863 852 

May 

868 

868 

871 856 

Jul 

880 

883 

885 873 

Sap 

889 

898 

896 887 

Doc 

829 

938 

935 826 


COFFEE C/lon no 



Cl 030 

Previous 

High/Low 

Sap 

1023 

1040 

1031 1010 

Nov 

1038 

mss 

1045 1024 

Jon 

1032 

1052 

1038 1Q20 

Mar 

1016 

1028 

1022 1010 

May 

1025 

1030 

1020 1015 

Jlv 

1020 

1030 

1020 1010 


SUGAR (S por too no) 


Raw 

Close 

Previous 

High/Low 

Oct 

239.20 

237 JO 

243.00 236.00 

Doc 

238.00 

235.00 

230.00 

Mar 

227.00 

22440 

23060 224 JO 

May 

222.00 

219.00 

219.00 

White 

Close 

Previous 

High/Low 

Ocl 

239.00 

256.00 

260.00 254 00 

Doc 

255 00 

254.00 

254.80 253.00 

Mar 

255.00 

25500 

257.00 2514X1 

May 

257.00 

253.00 

25500 255.00 

Aug 

258.00 

255.00 

258.00 257.00 


Turnover: Raw 2319 (3294) lots of SO tonne*. 
White 1331 [343) . 

Pans- While (FFr per tonne): Oct 1680. Dec 1655, 
Mar 1ES5. May 1085. Aug 1665 Oct 1670 


GAS OIL S/tonne 


Close Previous Hlgh/Low 


ccontsflb. r-rlnggH/kg. y-Sep. Q-OCt w-Sop/Oct 
x -Aug/Sc 0- s-Sop/Oet tMcal Commission aver- 
age" tatsiodk prices. * change trom a woek ago. 
^London physical market 5C1F hotter dam. a|» 
Bullion market dose. m-Maiayslan conts/kg. 


Sep 

Oct 

Nov 

Dec 

Jan 

Fob 


131.50 133.2S 

134.50 13575 

136.50 138.00 

137.75 138.50 

135.00 137.00 

135.25 134.75 


133.50 131 25 
135.75 134.00 

137.00 135.75 

139.00 137.50 
13725 136.00 
13525 


Turnover 2539 (2502} lots * 100 unites 


GRAMS C/tonne 


Wheal 

Close 

Previous 

HJgWLow 

Sep 

107.00 

10665 

107.00 106.70 

Nov 

109 65 

109.60 

10965 10940 

Jan 

112.75 

112.70 

11275 11260 

Mar 

115.2S 

115.25 

11565 115.00 

May 

118.00 

118.25 

118JS 118.00 

Barioy 

Cioee 

Previous 

Hign/Low 

Sop 

101.05 

101.25 

101.15 10160 

Nov 

10465 

104.70 

10465 10440 

Jan 

10765 

10760 

10765 107.70 

Mar 

110.40 

110-20 

no.40 no sea 

May 

112-40 

112J0 

11240 11230 


Turnover lots ot 100 tonnea- 


bOMDOM METAL BXCHAKOE 


[prices supplied by Amalgamaud Metal Trading) US MARKETS 


Turnover 3470 (3429} lots o« 10 umnos 
ICCO indicator prices (SDRs per lonne). Daily 
price Ur Aug 22: 1083.81 (1090.64) :lOday aver- 
age (or Aug 23: 1121.55 (1134.05) 


Turnover 4812 (3890) lota o! 5 tonne* 

ICCO indicator prices (US cento per pound) (or 
Aug 22: Comp, daily 111.22 (110.80); . 15 day 
avorego 105.88 (10541). 



Close 

Previous 

l-figb/Low 

AM Official 

Kerb dose 

Open interest 

Alum Mum, wurK puiBy (S per tome) 



Ring turnover 6660 tonne 

Cash 

3 months 

2905-35 

2755-75 

2735-45 

2670-80 


2880000 

274000 

2755-75 

8648 tola 

Alumiiriain686% purity (E per tonno) 



Ring turnover 17625 tonne 

Cash 

3 months 

1720-5 

1584-5 

1603-7 

152656 

1880 

1590/1543 

18808 

1580-2 

1581-2 

43,743 tots 

Copper, Grade A (E per tonne) 



Ring turnover 33,178 tonne 

Cash 

3 months 

1356636 

1343-4 

1349-50 

1337-8 

1388/1387 

1359/1344 

13808 

1353-4 

1347-8 

63/492 lots 

Copper, Standard (E per tonne) 



Ring turnover 0 tonne 

Cash 

3 months 

13006 

13005 

>300-5 

1285-300 


>3103 

1310-5 


31 lots 

Silver (US conto/flne ounce) 



Ring turnover 0 ozs 

Cash 

3 months 

6703 

884-7 

uwim 

683-6 


8703 

684-7 

683-8 

518 lots 

Lead (E par tonne) 




Ring turnover 5675 tonne 

Cash 

3 months 

354666 

38006 

351-3 

357-8 

sv. 

354* 

3604)6 

380-1 

>1612 lots 

Mcftel (S per tonne) 




Ring turnover 7S2 tonne 

Cash 

3 months 

14100200 

13500-50 

14200-400 

13600-700 

13800/13450 

14150-200 

1340050 

13500-50 

S692 lots 

Zinc (£ per tonno) 




Ring turnover 17600 tonne 

Cash 

3 months 

802-4 

7908 

787- 8 

788- 86 

ear 

808/795 

807-8 

800-1 

786-7 

22682 tots 


POTATOES Ertonno 


LONDON BULLION MARKET 



haishm 80 tray oas S/troy «. 



Close 

Previous 

High/Low 

Nov 

65. □ 

66.0 

656 636 

Feb 

77.0 

80.0 


Apr 

86.4 

MS 

966 

May 

105.0 

1095 

109.0 1066 


Gold (flno oz) S price 


E equivalent 


Turnover 504 (480) lots Ol 40 tonnes. 

SOYABEAN HEAL £/tonne 


Close 

Previous 

High/Low 

Oct 

169.00 

16860 

17060 16560 

Dec 

176.10 

17860 

178.10 

Turnover 433 (224) low pi 20 tonnes. 

FREIGHT FUTURES SlOAndW point 


Ctesa 

Previous 

High/ Low 

Aug 

1256 

1255 

1285 1252 

Sep 

1379 

1390 

1385 1379 

Oct 

1458 

1483 

1480 1455 

Jan 1 

1405 

1495 

1405 1484 

Apr 

1520 

1525 

1520 1515 

BF1 

1248 

1844 



Turnover 120 (182) 


JUTE 

Sepl/Oct 1868 c and J Dundee BTC 3455. 
BWC5476. BTD S420. BWD S415. c and f 
Antwerp BTC S45S.BWC S445.BWD 8395. 
BTD $405. 


COTTON 

Liverpool- Spot and sh ip ment sales for the 
week ended August 19 amounted to 58 
mnnos against 187 tonnes In the previous 
week. Trading was very low during the 
week wtm only small orders made In west 
African growths. 


Ciote 
Opening 
Morning flx 
'Altemoon fix 
Day’s high 
Day's hM 


432 >2-433 
433^-433* 
432.70 
432.60 
433 h -434 
432-432 »2 


2S7-2S7tj 

25732-258 

257.024 

256.432 


Coins 

S price 

£ equivalent 

Maplelaaf 

445-450 

265-288 

Britannia 

445-450 

265368 

US Eagle 

445-450 

365-268 

Angel 

444-449 

28412-26712 

Krugerrand 

431-434 

268-258 

New Sov. 

102-103 

61-61* 

ad Sov. 

102-103 >2 

81-62 

Noble Plat 

550.25-584.7 

332-335.35 

SWrer fis 

p/Tine oz 

US cts equlv 

Spot 

400.10 

67366 

3 months 

41165 

688J0 

6 months 

42365 

70460 

12 months 

44560 

734.45 


LONDON METAL EXCHANGE TRAMB OPIUMS 


AtonMum (98.714) 

Calls 

Puts 

Strike price • tonne 

6epl No v 

Bapt Not 

2650 

205 

87 

2800 

122 

132 

2950 

87 

224 

Attanlafain (B06K) 

Cal* 

Puts 

2700 

1« 

5 

2850 

80 

37 

8000 

19 

125 

Copper (Grade A) 

Calls 

Puts 

2160 

148 187 

IS 83 

2250 

81 134 

51 128 

2350 

84 93 

104 186 


THE SOYABEAN COMPLEX began the 
day with two-sided trading, however, a 
combination of factors led to 
commission house tong-liquidation and 
local selling which, in the absence of 
serious commercial buying saw the 
markets dose sharply lower on the 
day, reports Drexel Burnham Lambert 
Expected deliveries of soyabean meal 
coupled with figures showing large 
stocks prompted crush selling to the 
products which accentuated the 
decline. Maize found early strength 
against higher cash values and export 
demand, but failed to hold levels as the 
soyabeans fell. Wheat continued to 
derivesupport tenders and export 
business. Cattle underwent a 
short-covering rally alter early 
pressure, hogs were featureless whits 
bellies rallied following a cold storage 
report showing a draw-down of stocks. 
Copper raided early on follow-through 
buying but finished the day lower as 
profittaking emerged. 

New York 

GOLD 100 tray 02.; S/troy oz. 



. Clone 

Previous 

Ngh/Low 


Oct 

sag j 

-S4&2 

S48J0 

53*0 . - 

Jan 

6466 

5513 

S5JL5 

544 J) 

Apr 

G52J 

S56J 

8859 

6554) 

Jul 

5582 

566J 

0 

0 

Oct 

366.7 

573J 

0 

0 

HEATWCI (NL 4%000 US palls, cants/US gaffs 


Latest 

Previous 

High/Low 


Sep 

‘ 4385 

4473 

4450 

4375 

Oct 

'4445 

4546 

4S3S 

4435 

Nov 

4620 

4006 

4390 

4610 

Dae 

4000 

4663 

4860 

4500 

Jan 

4635 

4724 

4800 

4635 

Fob 

4800 

4863 

4650 

4805 

Mar 

4460 

4518 

4500 

4460 

Apr 

4300 

4308 

4400 

4360 

May 

4270 

4308 

4290 

4260 

Jim 

4235 

4268 

4286 

4235 


Chicago 


SOYABSANS 5,000 bu min; oents/60lb bushel 



Ctoaa 

Previous 

High/Low 


Sap 

807/0 

841/0 

844/4 

806/0 

Nov 

818/4 

851/4 

856/4 

816/0 

Jan 

822/4 

852/0 

858/0 

822/0 

Mar 

821/0 

847/0 

B56/0 

821/0 

May 

810/4 

831/4 

841/0 

SUM) 

Jul 

801/0 

820/2 

823/0 

800/0 

Sap 

724/0 

733/0 

745/0 

724/0 


SOYABEAN OH. 66000 IbK cams/lb 


COCOA 10 tomeeS/tonnes 



Cteae 

Prevtoos Hlgh/Low 

Sep 

1335 

1323 

1«» 

1320 

Deo 

1389 

1387 

1372 

1354 

Mar 

1380 

1348 

1380 

1345 

May 

1385 

1363 

1388 

1385 

Jul 

1388 

1383 

1388 

1374 

Sap 

1415 

1408 

1416 

1402 

Dae 

1462 

1443 

1462 

1438 



Cioee 

Previous 

High/Low 



25.01 

25-52 

2580 

2485 

Ott 

25-32 

25-80 

28.05 


Dec 

25.77 


26.55 


Jan 

28.07 

28J3 

2880 

26-05 

Mar 

2045 

26-83 

27.25 


May 

28.70 

27.06 

27.30 


Jut 

28.27 

28.75 

2740 

26J0 


SOVANEAN NEAL 100 tons; S/ton 


COCKE "C* sraoONs; cento/U* 



Cioee 

Previous 

Mgh/Low 


Aug 

4828 

4338 

434.0 

4323 

Sep 

433-5 

4348 

0 

0 

oa 

438-0 

437 .4 

437-5 

4368 

Dec 

4418 

4438 

4438 

4418 

Feb 

4488 

440.4 

4408 

4488 

Apr 

454.0 

4554 

0 

0 

Jim 

4600 

481.4 

0 

0 

Aug 

468.1 

4878 

0 

0 

Oct 

472_3 

4738 

0 

0 



Close 

Previous 

HJgh/low 


Sep 

121,22 

135 an 

1Z7JS 

12180 

Dec 

123-41 

127.19 

127 JO 

12280 

Mar 

12270 

12580 

12680 

121.75 

May 

12280 

■104 40 

12580 

12200 

Jul 

12180 

12625 

12875 

12400 

Sep 

12186 

12380 

184-75 

T2306 

Dae 

11882 

.12300 

0 

0 



Close 

Previous 

Hlgh/Low 


■ »• 

286,3 

2848 

286.9 

255J 

Oct 


281.2 

2548 

KIA 

Dec 

252.7 

2SB.7 

2838 

2528 

Jan 

2308 

2688 

2508 


Mar 

2460 

250.0 

2558 

245.0 

■jfMjsr 

2410 

245-0 

2400 

2308 

Jul 

240.0 

2408 

2438 

2348 

Sap 

2198 

2188 

2218 

2148 


MAIXC 6000 bu tnjn; conts/S 6ffi bushel 
Cioee Ptodout Hlgh/Low 


SUOA* WORM “U" 1T2JM0 lbs; cents/tba 


SLVQI 5,000 troy 0£ Cttnto/troy OZ. 



Ctoaa 

Previous 

Hlgh/Low 


Aug 

8738 

5738 

0700 

8708 

Sep 

8748 

8748 

87/8 

8608 

Oct 

8708 

6798 

0 

0 

Dec 

6008 

6308 

8038 

8838 

Jan 


6052 . 

0 

0 

Mar 

706.4 

7062 

7088 

7028 

May 

7178 

717.1 

7218 

7208 

Jul 

728.1 

TOJ 

7310 

7280 

Sap 

7405 

740.1 

0 

0 

Dec 

7578 

7572 

7820 

7818 



Ctoaa 

Previous 

Mgh/Low 


Oct 

1027 

10.13 

1082 

10.14 

Jan 

986 

■880 

0 

a 

Mar 

988 

9.72 

10.17 

9.78 

May 

922 

986 

0-87 


Jul 

9.63 

845 

» JO 

943 

Oct 

981 

020 . 

885 

925 

COTTON 80800; certs/lbs 


Cioee 

Previous 

Hlgh/Low 



COms 25,000 fee conts/lbs 



Ckao 

Previous 

Hlgh/Low 


Aug 

10085 

100.40 - 

.10180 

9020 

Sep 

10085 

10080 

10120 

9925 

Oct 

9925 

9925 

0 

0 

Dec 

9880 

S8JS 

9880 

9680 

Jan 

9680 

19875 

0 

0 

Mar 

nafio 

WJ& 

94JD 

9280 

May 

9090 

91.75 

9200 

90-75 

Jul 

8880- 

0080 

6920 


Sop 

80.90 

8825 

0 

a 

Dec 

8500 

8820 

8620 

9600 

CRUDE OIL (Light) 42JXH US gaOa S/barrel 


Latest 

Previous 

High/tow 


oa 

1581 

1581 

1323 ’ 

1620 

Nov 

1587 

HL99 

1582 

1528 

Dec 

16.76 

1609 

1881 

15.74 

Jan 

15J9 

16.12 • 

1603 

15.79 

Feb 

15J9 

16.13 

1604 

1880 

Mar 

1580 

16.14 . 

1683 

1680 

Apr 

1580 

16.15 

1681 

1520 

May 

1580 

16.16 

1605 

1580 

Jun 

1008 

18l17 

1686 

1608 

Jut 

1804 

16.18 

1684 

1604 


Oct SOM 


Mar 

May 

Jul 

oar 

Dae 


4922 

40.13 

4846 

5040 

81.18 


5035 

5060 

8080 

51.22 

5245 

62.70 


51.20 

4840 

4040 

■*9.75 


5030 


fz 

Dec 

Mar 

Mpy 

Jul 

Sap 

273/8 

284/0 

288/8 

28040 

283/4 

270/4 

277/2 

286/D 

290/2 

291/4. 

287/0 

272/4 

281/0 

289/4 

293/4 

294/0 

290/0 

275/0 

272/2 

281/0 

285/4 

286/0 

282/D 

270/4 

WHEAT 5800 bu min: eenta/ttKb-tashel 


Ctesa 

Previous 

Mgh/Low 


Sap 

388/0 

381/0 

386/0 

381(0 

Deo 

308/4 

393/4 

388/0 


Mer 

404/4 

306/0 

406/0 

995/0 

May 

374/4 

370/0 

375/0 

371/0 

Jul 

346/4 

344/4 

348/4 

346/0 


61 JO 
81.75 


48.00 

4003 

4828 

5035 

5075 


LIVE CATTL E 40.000 to* 

CtoaePrevtous Hlgh/Low 


PRANCE JUICN15400 fee; tanN/fea 

dot* Previ ew Hlgh/Low* 

1»1.75 19Q40 

■WM0 • 182.10 

W44Q 17605 
17230 T 71 JXJ 
1^025 17000 

18060 18060 
Q 0 

0 o 

0 .0 


Sap 

19050 

19125 

Nov 

18285 

19295 

Jen 

173.15 

17446 

Mar 

17180 

17296 

May 

10085 

17090 

Jul 

16696 

«990 

.Sep. 

16645 

16625 

Nov 

16645 

16625 

Jan 

16645 

16025 


Oct 7037 70.70 

Dta 7162 7167 

W» 73.17 7267 

Apr 7462 7447 

Jun 73.72 7365 

Aug 7160 7165 

Sep 71M 7160 


7062 

7167 

7367 

74J2 

7365 

7165 

0 


7060 

7165 

7267 

74,12 

7360 

7162 

0 


UVEHOQS 30600 lb; oentsrita 


Ckaa Previous HloWLow 



Ihrmccs "1 

NEUTERS (Base; September 19 hbi 

- 100 ) 

tes a 

Aug ig 

■nmh ago yr ago 

16466 

18&60 

1967.5 

1572.4 

I Btm «*OHE® (Bate: Dec. 31 1974 „ 

100 ) 

SpM 13198 
Futures 13592 

13299 

13631 

137.19 

141.79 

12685 

13090.. 


4097 

4637 

4096 

4027 


4292 

4298 

4295 

4650 


44.47 

4497 

44.75 

405 

4397 

4340 

44.10 

4650 

-1 

47 90 

4790 

4790 

4740 


4620 

4790 

4640 

4600 

■> • 

4660 

4670 

4790 

4690 



SQSK MaxNai 38.000 tea; cana/la 

cause Pfavtova Hlgh/Low *¥• 


Aug 

Fab 

Mar 

May 

Jul 

teg 


3695 

3625 

3750 

' 3670 

6680 

5632 

54-00 

53-20 

53.60 

53.70 

64.15 ' 

6640 

5492 

54.72 

5545 

64.02 

6495 

5492 

6640 

5498 

toss 

5612 

5650 

6227 


\ 


Acy, 


r £, 










FINANCIAL TIMES WEDNESDAY AUGUST 24 1988 




$ $ 33 


WORLD S 






1“ 

6*8 

D 

*15 

<5 

-30 

-if" 

■i" 

1-3 



CANADA 


TORONTO 

Closing prices August 22 

Qaotatlena in carta urtsss marte* 3. 
11BS15AUCA M 460 4SD «- 5 
ZOTOMrittriPr »% 71 71 

500 AeUartdi 310% 15% 15% + 1( 
1890Aanfc»E 317% 17% + % 

10129 ABM Efl 515% 15% 16b 

ZVSO Afina N ns% 14% »*%- % 

388374 Nan *37% 363, *8%- U 

•1030 A Barrie* $21% 21 21k- b 

7744 AXO I I 38b B% 9% 

98067 BCE Inc 136% 36b 36% + k 

11450 BCE D 346 3*0 340 

630 BC Sugar A $27% 27b »%- % 
1*10 BOR A 310b W% 10b- % 

4H3 BP Canada SIBb 18 1* 

19913 Bk Mom *27% 27b 27b - b 

BB031 Bk MSco» *13b «% 13b- % 

400 Baton 313b ISb Ub- % 

22800 Betmorrt 203 203 204- 1 

300 Bambdr A Sllb 11b 11b 
13000 Bemtar B Sllb 11b "%- b 
S8813 Bow Valy S13b «% 13b 
WUOO BmaiM 326 27 % 27 k - k 

82730 Braacan A 326b 2Sb 26b- b 

2SS73 Brtnrttor 480 470 476- 5 

21*89 BC ForP 318b 18b M% 

3220BCR* 86 88 86 

1887 BC Ptoen* 327*2 27b 27b 
3790 Smncor St7b 17b 17% - b 

MOBrunawk Sllb lib lib- b 

90260 CAE Kb 9b 9b- % 


111 Hb- *» 

ask-s 


100 C8 Pei 318b 18% 

S90QCCL Bl 33b 3b 8b 
2S00CamMor 316b 15b 1#b + b 
24300 Carabridg 328b 28b 28b" b 
4000 Camp Raa 141 141 Ml- 2 

37600 Campeau I 317% 13b 17 - b 
1824 C Nor WM3 312% 12% 12% - % 
4960 C Packra 5Mb M% M% + % 
asumc Exprea l ids mi n»+ s 

90 GG Invest $38b 38b 38% 

139884 0.88 Com 3Z3H 22% 22% - % 
BOO C Marconi 315b 13b 15% 

2667 C OcdeoWI SiBb 16 M - % 

17 1278 CP Ltd 322 21 b 21b- % 

3700 C Roxy 38b 7b 7b- % 

64724 CTIro A I 317b 17b 1Tb- b 
2223 CUUI A I 318b 1«% 18%+ b 
525 cum B Slab 13% «% 

802Canamaxo 37% 7 7%+ % 

2000CanamA t S7b 7b Tb + b 

713S Cantor S2Sb 23 25%4 % 

21850 Cannon A $11% 11b 11% - % 

4100 Cam SM% M M - % 

6250 Cara A 1 313% 13% 13%- % 

100 Carons 331% 31% 31%- % 
600 Caacadaa ss 5 5 - % 

4660 CaiaMM 335% 28 28 

2300 Cen Capital JlA* 11% 11%- % 

113037 CooCap A *10% 9% 9%- b 

4100 CanfFd A n% 8% 6% — % 

1400 CMran 325 320 32a 
200 Quartan SOb T3b 13% 

7800 CHUM B I *17% 17% T7% 

72221 Cmaplax 311% It 11% + b 

B4232 ConOnco 319 M% M%- % 

10850 QMapudOB 35% 5% 5% 

2554 Con BaOi A 314% 14% 14% 
19800 Con TVX 37% 7% 7%- % 

900 Caaw Qaa »\ 24% 24% 

183 CottwaJ B 311 11 11 


5T5b 15b 13b + % 
128% 28% 28%- b 


I*a i & 

! b ' SR St 

UBHO 37% 7 7%+ % 


Maw Saw* Mad taw Cloww Chog 

600 Corny A 318 18 18 

H00 Cowan 310% 10% 10% - % 

200 Crown 38% 8b 6b- % 

79B00 botmi A I 490 480 490 + a 

seas Dwnlwoo A S5b 6b 6b 
6636 DanlaoB B I ffi% 480 490 -10 

800 Dorian 312b 12% 12b- b 

28800 Dfckoao A I 86b 6% 3% - % 

47797 Ocdaxeo 328% 28 28%*- b 

321033 Domw Pots 136 134 134 

37BM D TaxtBe 316 1S% 16 

6353DOR4wr 312% 12% 12b- % 

33200 Do Pont A *27% 27% 27% 
i»io Dumb a *io% iob 10% + % 

SQOE-LFln *13% 93% 53% 

93831 Echo Bay 322% 22 22%+ % 

12900 EntpbwA f *11% 11% 11b- % 

3300 Enfield *8 7% 7% 

14200 EqubySv A 35% 9b 5b 
700FCAMI 88% 8% 8% 

19408 FR Ud Hflb 10 10 - % 

402140 Flcnlxdg *23 22% 23b- b 

99700 Fwd tnd A 317 K% 16%-% 

BOO Pnd Pmn *n% 11% 11% 

17100 F*i Trace *6% S% 6% - % 

2200 Fhwfrig L 522% 22% 22% 

3200 FC«y Fin 318% 18b 18b 

300 Fort Cnda *119% 110% I19%+-4% 
*13? Form 313% 13% 13% - % 

*750 FourSawwn ( 321% 21% 21%- % 

9790 Franco O $5% 8% 8%- % 

201BGWIMI $34% 24% 24% 

39844 Galactic $6 3% 3 

142S0 Qandrtf 37% 7% 7b- b 

700 GoncUa A *18% 18% 18% 

200 G TirtcO p 321% 21% 21% — % 
1090 Glacnia 388 880 990 

10900 Gowcorp I *7% 7b 7% - b 
38530 6M KnlgW JlOb 6b 10b + % 
14700 Gmhoa A I 318% 10% 10%- % 
27200 Oranges 438 425 435+ 10 

1200 GL Group *17 17 17 

4000 CM Utaco 312% ' 12% 12% 
SEOGrwytwrt *31% 23% 23%+ % 

87742 Gofi Rat *17% 17% 17% ♦ b 

11500 HeJoy 33% 8% *% + b 

MOO Hama A $B% g% B%- % 

182 Hayta D 312 12 12 

*0560 HoM Ml $24 23% 23%- % 

20950 Hemlo *14% Mb M%+ % 

8500 HetBngr 313% 18% 13% - b 
61400 Horsham f 36% 5% 5% 

7000 H BayMn a 33% 8% »%- % 

4145 H Bay Co *18% 18% 18% - % 

33S50 linaaco L *34% 24% 24%- % 

Z259B knp 08 A *64% 93% 63% - % 

*36*79 Inco $35% 35% 35% - b 

IMOOMdal K 9 9 - % 

320 Intoad Gas *11% 11% 11% - b 
99000 bmopae 18% 9b 9% 

23129 Inter Oty *19% 19b 19% - % 
9070 tomr txnan 347% 47% 47b + % 
23700 Inti Thom *13% 13b 13b 
1100 mv Grp *13% 18 13%+ b 

IMS tpaco *18% 18% 18%- % 

1700NWOOA1 313b 12% 13 

83M Jannodt 3lS% 15b ISb 

lOKoltrDA S35b 33% Kb 

300 Kwr Add $20% 20% 20% 

29824 Laban 321% 21% 21%+ % 
73711 Lac Mnrts $13% 12 % 13 - b 

600 Lafarge p $20% 20% 20%+ b 

59600 LakSaw A 318b Mb Mb- b 

256432 Ltldtw B 1 SIS Mb 14%-% 
400 Laur Bk 310% 10% 10% 


11800 Hatoy 
MOO Hama A 
132 Hayea D 


3% 18% 18%- % 

l*b 12% 13 


Bate* tact High Low Ctoao Ong 
400 Laur Or B 37% 7b 7b- % 
SBQOLawmUA 313 13 13 - % 

WOO Lob lew Co S12b 12b 12b 
1800 Lonvaat 317% 17% 17%+ % 

eaeoo Lunooka 486 480 450- 3& 

4850 MDS A 326% 26% 28% 
2S0UD6B *23 b 29b 2&b~ b 
28569 Mac Kairta *36 425 <25- 10 

88*01 Ucftm H X 311% 11b 11%- % 
66*434 MUn HY I *10 ID 10 
88999 Uacmllan 317% 17% 17%- % 

40220 Magna A I 312% 17% 12% 

2395 Maritime C 315% 14% 15% 

1Q682 Mart. Rea a 9 9 - b 

300 Me Myra *81 81 61 

4240 Mammae 313% U% 13% 

8900 Melall M ab 9 9 

800 Mdmd Dry SB 8 8 

34350 Minima *20% 20% 20% ♦ b 

12500 Ml lei Carp 280 771 272- to 

4982 Merten A I 325% 25% 25%- b 
7774 M Truaoo *16% 19% >6% 

23848 Mooro 327% 26% 26b - b 

22948 Muacn ch o <20 410 415+ S 

10530 KM Bk Can *10% 10% 10% 

7800 N BaMnaaa 203 200 200 

24334 MVGTieo $25% 2S 25%-% 

W71 NewTal Enl 317 16% 17 

3950 Noma A 314% M% 14%+ % 
28800 Noranda F 314% 14% M% - % 

153388 Noranoa 322% 22b 22% - % 

5072 Norceo *19 b 19% 19%- % 

7888 Ncrcfi A f *17% 17% 17% 

90387 NC 09* S1B% 16% 18% 

74880 Har Tat **1% 20% 20% - % 

19800 Northgai *7% 7 7% - % 

6*3543 Nova f 312% 11% 11%-% 

1D0S0 Noverco *11% 11% 11% 

5100 Nowico W 315% 15 15 - % 

in Numac StOb Wb 10b + V 

12800 Ocetet B I »% 9b 9b - % 
*800 Onex f 313% 13 13 

6897 Onax mg ab 9b 8%+ % 
1890 oaan A I STOb 20% 20% - b 
98800 PWA Core 320% 20% »% 

4350 Pgurin A I S8b 8% 9% 

10680 Pamotr a% 8% 8% - % 

1150 PanCan p 324% 24% 24% - % 

3900 Pogsana 315% 15% 15% 

5880 PJewl A I S15b 15% 15b- % 

9584 Plonaar M 37% 7% 7% - % 

189835 Placer Dm 316% IB 18 

16916 Poco Pet 3Mb 10 ID - % 

189323 Ptttysar E *20% 20 20% - b 

79975 Powr Cor t *13 12% 12% - % 

45650 Powr On SU% 14% 14%- % 

3133 Provloo a% 9% 9% 

158450 Ranger S7« 7% 7% - % 

2100 RayrocX f 18% 8% 6% 

2020 RedpnSi 310% Mb 10%- % 
2500 RotOnan A I 317% 17% 17%- % 

10*11 Renlaanca 312% 12% 12% - % 

M82S Rapap I 311% 11b 11% 

16*39 Rio Algom 322b 21% 22b + % 
16256 Rogore B I 352% 51% 5l%-i% 
1400 Rothman 344% 44% 44%+ % 
174202 Royal Bnfc Ol% 31b 31b- % 
12771 RyTrco A 316 16b 16% - % 

MKbSHLSym $S 7% 7% - % 

M0SNCAI a 7 7 

<500 Stt. CemA I 311% 11% 11%+ % 
4800 Samuel XT 317 17 17 

9053 Basko* ab 9% 9% 

8900 Sceptre 410 400 400- S 

laoOSCMMdorA 325% 25% 25% 


8900 Scot Paper $17 17 17 

11840 Scott I 312% 12% 12% 

EDO Scotia C 313% 13% 13% - % 

40095 Saogram *86% 64% « - % 

B9BO Sun Can *11% 11% 11%- % 

3000 Selkirk A t 324 24 24 

33260 ShaU Can S«3 42% 42%-% 

65492 Sherrill ab 9 9 

1096 Sonora 990 390 3SO 

BS255Mham 319% 19% 19% + % 
207SS Spar Aaro I Slab tab 19% - % 
36900 Slalnbg A f S29 29 29 -% 

22821 Slalco A 524 23% 23% 

3400 TCC Bov *7% 7b 7b- b 

12677 Tack B f 315% 15 IS - % 

64663 Texaco Can 338% a 38% 

30950 Thom N A 326% 26 SB - % 

268895 Tor Dm Bk *32% 32 32 - % 

3400 Tor Sun 122 22 22 

24800 Torenr B I *27% 27% 27% 

3100 Total Pot 318% 16% 18b - % 

97907 TrnAtta U 313% 13% 13% - % 

39957 TrCen PL 313 12% 12%* b 

110697 Triton A 317 18% 16%- % 

30082 Trtmac 410 360 410+ 30 

4460 TlOOC A ( *32% 32b Kb 

EDO Trane B 335% 35% 35% 

200 IMP A *13% 13% 13% 

5957 Unlcotp A a 7% 7%- % 

2500 UnigkCBB I 37S 375 378 - 6 

842 Un Carttfl $18% 19% 19%- % 

IMS? U Emprlao *9% 9% 9%* b 

355 Un Carp 53* 34 3* 

52388 Vailly C 345 335 339- 18 

800 Viceroy H 37% 7% 7% . 

2800 WIC B I S13% 13b 13b 

1100 wtja* A Sllb lib 11% 

3800 WM Fraser 318% 18% 18% 

31080 Wornd E 316% 18% 16% - % 

ion Weswun *10 ID W 

28000 Weawn 3)2% 32% 32%-% 

4G63 Ufuoowo A 446 44$ 446 

in Xarm Can 317% 17% 17%- % 
I- No voong ngUa or remnewa votbig 
rlgMs. 


MONTREAL 

Closing prices August 22 


200 BombcdrA *Tt% 

53448 BambrdrB *11% 

8675 C8 P*k *18% 

27480 Caacaoes $85% 

1675 CorGaOi *14% 

>118 MnTIrst *18% 

32389 NatSkCda *10% 

12855 Noverco *11% 

12150 Power Carp *13 

15188 Prevlgo *09% 

*5719 Royal Bank $31% 

2225 SMnbrgA $20% 

2320 Vtdeooon tub 

Total Saloa sues than 


11% 11%- % 
»% H%- b 
18% w%+ % 

05 OS - % 
14% 14% 

Mb 18% 

10% 10% 

11% 11% - b 

12% l?%- % 

ob% n% 

31b 31b- % 
28% 28% - % 
n% 11% 


OVER-THE-COUNTER 


Nasdaq national market. 2pm prices August 23 


Sloe* Dhr. 1O0a Wo* Lota lewtoreg 


na. 100a Up Low toatrhng Sion mv. MOo 


Continued from page 35 

pumsen .11 SO 486 22% 22% 22% + % 8Mligt 2* 

PyrmT M 72 10% 10% 10% SEEO 

Omax 54 208 3% 3% 3%+ b Baton! S3 

OVC » ID 9% »b 9b — % SetcUna 1-24 

OiwkCb S* 12 24 19b t» 19b + b Sanaor .10 

Quwrtm 126 397 11% 11% 11b - b Soouant 

Ouftahr a 11 35 6% 6% 6% SvcMar JOB 

B R.p v SvO^k pgj 

RPM B M 16 198 14% Mb Mb- b StxrMad SO 

RabbiiS 13 2% 2% 2% - % BhawM L28 

RadSyw.Mo U 6 9% 9b 9b Shorwy h 

RaloftFS 8 56 lib 10< W%-%8hrwd* 

RartmL SO 23 24 34% 34% 34% 8tgmAI JSt 

Rawvaa 4» 79 8% 6% «%- b SigreO a 

Rw9b« _ 21 287 28% 26% 26b- % SlfcnGr 

RagfBc SOm 10 ID M% Mb 14% - % suicnVl t 

Rapap J056 74 9b 8% 8%- b Stllcnx 

Rapigii 28 Gb Sb Bb+ % Simp*" SO 

RapAm 74 ID 8 13% 13 13% + b Siller 

RaatMo JOB 16 329 10% 10 10%+ % 8mtf 

RsUHaMSi 1902 24% 24 34 SCCMV U6 

Raxon 10 48 0% 8% 6% + % SoctyG* *0 

RayRy .78 W ID 19 18% 18%+ % SftwPb 

RIOUm B7 3% 3b 3%+ % SomtSa JB 

Rle*D Mr 19 6 13% 18% 18% - % SooocPd J2 


M 253 28% 2S% 25% 

9 53 8b 8% 8b+ % 

8 77 13 13 13 

5 23 ^ « « 

38 SB 17% 17% 17% 

10 1068 11 10% 11 + b 

415 9% 8% 9 + b 

10 1072 18% 18% 13% - % 

1005 26% 28% 28% 

828B 7% 6% 7 + % 


RlefcEJ Mr IV 8 13% 18% 18% - b SooocPd J2 

RchraHl.lOa 20 K 23 23 23 - % SCarW M 

RtggaMI.IO 14 87 20 19% 19% - % sCalWI 202 

RoadSvI.W 20 1448 29 28% 28b + b Eounac 

RbtHBo __ 24 17 20b 20b 20b Soutret M 

noctiCS JB 9 104 11% 11% lib Soma 1-K 

Ravtlfd .100 4 T70 9, *% 8 + % Spiagsl SIB 

RooaStf .16a U 2 8% 8% 8b SMMlc 

RoaeB .16a 18 128 8% 8 8% SkMag M 

Ro op tc K T5 21 21% 21b 21% SaSfflo 82 

RouScr 168490 9% 9% 9%+ % Safflci JO 

Roan .52 TO 450 21% 20% 21 - % BMoiT a 

Roytpr 22 84 3 2 13-16 2 13-18- 1-18 SrwSN a 

RyaoF M 952 5% fib 5% BwtnT 78 

Stratus 

- s-s - Strwto 1.10b 

SCI Sys 13 MSB 11% 11% 11% 8Vud7y 

S3 Mo 20 458 19% 10% Mb Stryker 

SFFad 5 117 13 12% t2% SfeiOL Vt 

3HL Sy a 1448 8% d 6 « - % Subaru 

SKFAB1.73# 146 49% 46% 46% - % StfFln -10| 
Safaod 71010 6% 6% e%- % Samgph 

Ses«» ID 7 729 25 24% 24% + % 8umerp 56 

SagHbr 2 14% M 14% + % SubBB .720 


SagHbr 2 14% M 14% + % SubBB .720 

Sahlan 10 201 1 1S16 1 13-18 I 15-16 SuoGrt 
SUuda M ID 35% 35 35 - % SudflC 

SlPau® 30 8 89 10% 10% 10% - % Suawat aL12 

flUPaul a 2 8 783 42 41% 41% - % SyHMo 

Sellck 17 2 13 13 13 8»«tln 

Sanftd a .18 12 31 Z7% Z7 27 - % SySoOw 

Scharer jn 24 641 26% ab 28% - b Symmi JOa 

SchtmA M 13 25 38 351} 35% 

Sdmad « 17b 18% 17 7BC a 

Sctrex 8 148 6% 6 •% . tea 02 

Seaoata 6 9088 9 d 8b 8%- % TC8Y 319 


10 1072 16% 15% 15% - % 

1095 28% 28% 28% 

8288 7% 8% 7 + % 

16 8S5 14% 14 14%+ % 

22 1394 44 43% 43% - % 

13 SES 17% 18 W% + % 

17 844 14% Mb Mb 

15 132 6% 8% 

31 4S3 9 8% 8%- b 

11 170 13% 13b 18b 

M 79 17 18% 18% - % 

8 T10 33b Mb 35% + % 

8 849 36% SB » 

7 1*8 21% 20% 20% — % 

13 2024 16% 17% M%+ % 

6 1» 11% 11% 11%- % 

17 99 29% » 29b 

9 5*1 21b 20% 21%+ % 

10 40 27% 26% 27% — % 

17 *7 18 17% 18 + b 

M tt 21 ZD% 20% 

8 823 Stb 32 32% 

13 1012 9% 0% 9%— b 

82 fib fib »b . 

is 70 18 17b w + % 

1111*7 34% 24% 24% - % 

11 41 «% 19b 19b- b 

17 Ifi 17 1B% 18% - b 

9 105 20% 28 30 - % 

45 10 M% Kb 19% 

W 1207 22b 21% 22 - % 

9 946 93% 33% 33%+ % 

19 33 15% 15 « - % 

24 89 22% 22% 22% 

137 92 73% 73% 73%+ % 

25S 8% 5% 6 

101 8% 9% Bh+ b 

8 7 11b »% «% “ % 

9 133 19% 19% 19% 




1W 8% 6b th+ b 

8 7 11% 11% 11% - % 

• 133 19% 19% 19% 

M a 21% 21% 21%+ % 

20 527 18b 17% 18 + % 

21 41® 38 37% 37%+ b 

9 12 28% 26. 2S%+ % 

148 7 8% 8b- % 

5 52 4% 4% 4% 

21 234 19% 19 1>%+ % 

22 122 30% » 30%+ % 
- T-T - 

9 785 11% 11% 11% 

57 4 32 32 32 + b 

21 800 12% »% 11% - % 


TCF .Ma 

IHEa 
Tandem 
TctOta 
Tnoxn SJBa 
TalcaiA 
Tetocad JB 
Tafaaats 
Tataha 
Tetxon JD1I 
Tennant JB 
Taradta 
3Com 
TMWttt 
TokloF o t 
Toppa a job 
T ratBn a 
TWA pi 
Trail ua 
TrtadBy 
Trknod 
Truajo 56 
Tartep 1J0 
aocnin M 

TycoTy 
Tyson M 

USMX 

UST Cp 52 

un. 

tWBc 1.18 
UnBKp JO 

Un® 

unHaa mb 

UoPkitr 32 
UACm J4 

uacoi 
unEdSs 
UHreC X 
UHUCr 
UldSvrs .72 
USBcp 1 
US MIC .18 
US Trat 1.18 


138 0 8% 8% - % IVarhm 

29 938 5% 4% 5 Vartan 50b 

4 15371 15-18 1 13-18 1 IS-IB-1-WVarora p 
14 223 15% 15% 15%+ % Venae 

11 2 148% 146% t4B% -1% VIeoip 

3896 22% 22% 22% MeaMa 

164 38b 37% 38 + % Vlldng 

21 821 10% 10 ID Vtponl 

13 Sil 12% 12% 12% Wratak 

IT 2S5 17% 17% 17% - % .Volvo 152a 

18 2 27 27 27 +1 

28 2D 16% 15% 15% — % 

221512 17% 17b n%+ % WD 40 M0a 

19 29 Ztb 20% 20% WTD 

87 SB 74% 74% 74% + l Wolbra .48 


• 598 12% U 12%+ % 
6 48 9b 9 9%+ % 

52 32 31% 31b- % 

13 289 22% 21% 22% + % 
12 228 11% 11b 11%+ % 
32 89 19% 18% »%- % 

11 41 Mb 28% Mb + % 


WD 40 1J0a 
WTD 

WalbtD .48 
WaltCp 40 
Warren 
WBcOC 28 
WtaliEn 128 
WFSL U» 
WMSB JO 
WaBBind .12 
WauaP 52b 
Naxfim a 


12 228 11% 11b 11%+ b WFSL 1-08 

32 89 19% 19% 18% — % WMSB JO 

11 41 Mb 28% M%+ % Waaalnd ^2 

7 68 24% 24% 24% Waurf 52b 

13 IK 18% Mb M%+ % WBxmna 

T BM M% 13% M%- % WMfc nn 

M 558 17% Mb Mb- % "WCap 

— U— U — WatFSL .40a 

« 5% 415-16 5% + 3-18 WatnPb 

9 M Mb Mb «%+ % WMrtA 

10 203 7 8% 7 - % Watnuk 

10 1 36 35 35 WiboiC Jfl 

12 ill Mb Mb M% W a t o n 

8 375 22 21% 21%+ b WatwOn 

8 108 2fl% 29b 2B%+ % Waa™" -» 

14 22 28b 25% 28 + % Wh*T<* 

29 133 28 zr% 38 + % WDyJ * 1™ 

385 14% 14% 14% - % WUlBfllt 120 

4 2211 4% 3% 4% WillAL 

fi 3 28% 28 28 - % WIMPS -20* 

182 8 15-16 3% 3% — % WllmTr J4 

5 40 Mb 17% 17% WlianF 

a 386 24% Mb 24b- % „ 

1M 4% 4% 4% WlsarO JO 

12 173 38 37% *7% 

15 32 20 19% 30 WohCx 

35 » 27% 27% 27%- % WOrtbg M 

13 48 17 16% »%- % Wyman JO 


23 7 21% 

13 08 20% 
ID 4% 

Mini wb 

383 «% 
42B 4% 

18 1 34% 

33 135 15% 

202 V 

6 165 48% 

- W-W - 
13 32 31 

7 382 10 

19 M 31% 

30 54 13 
M 9 ■% 

1 17 

13 201 15% 

8 SO 23% 
8 1303 1T% 

16 112 34 
12 70 33 
18 332 8% 

17 MS 38b 
» 80 10% 

6 2 38 

IB 401 19% 
97 55 18% 

1M *1% 
M3 17 
191582 16% 
30 206 11% 
16 427 26% 
29 1026 23% 
32 6 35% 

7 X2S 4fi 

b see )9% 

10 M3 0% 

a it w 

23 8144 12% 

12 3956 17% 
123 1220 15% 

8 69 14% 

2G8 11% 

IS 518 22% 

13 1122 14% 


UnTalav 35 » 27% Wb 27b- % vwmg a * is »ia a 

tMWFr .IS 13 48 17 1B% M%- % Wyman JO 13 1122 14 

UnvMt 192 478 8% 5% 6% 

UrwSvg JO M 7 23% 23b »%+ b • -X-Y-Z- 

- V-V - XL Dt a M 176 * 

V Band la 3 03 11b W% M%+ % XOUA 7M t. 

MSt 81 70 8b 8% 8%- % X-BSa x 12 217 H 

VM SR » 47 14 13b 13%- % Hcor 15 T70 | 

VWR JO II US Mb 17% M - % XMax 2629 1 

VsfiQLo 31 774 6% 5% 5% Xyloglo 7 30 £ 

VaFBL IS 80 M 13% 10% - % Xyvsn 3 1B9 

VaDtH 1J4 21 4C8 M% 29% 29% - % YtowFs .70 K 872 a 

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12% 12% 

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M 872 a 25% 25% — % 
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l »'<*\ vll jii** «n Business? 


Enjoy trading you* CompBokenimy copy of the F hamcial Times when 
you're Maying. . . 

. . . inluitialiiinigauhc 

Hotel Cravat* Hofiday Inn* lotetcontinenta! Hotel, Hold 
Resident 




TOKYO - Moat Active Stocks 

Tuesday 23 August 1988 



Stocko Closing Change Stocks Cloning Change 

Traded Prices on day Traded Prtcaa on daw 

SumMuno Hasty StMn 885 +20 MOC 76J3m G8T -6 

IbtauOisM OU 2541m 1.100 + 80 Kaiaal Electric 

Mppon Steel 2373m 710 -B RaSway 1520m 2JH> 

tcawoiaki Swot - ia.74m 748 41 Nippon Expraaa - 14.54m 1,480 

MaaMo Start 17 JSm 1.150 -ID Fuji Heavy MJ8m 883 


Refiway IBJOm ZBK +90 

Nippon Expraea - 14.64m 1,480 -90 

Fuji Heavy MJSm 883 +K 

Koyp Softs — 1224m 1.070 + 70 


Have your 
F.T. hand delivered 
in France 


J_f you work in the business centres of 
ANTIBES, BORDEAUX, CANNES, 
GRENOBLE, LYON, MONACO, NICE, 
PARIS (all arrondissements) plus 92000 postal 
code, STRASBOURG, TOULOUSE or 
MARSEILLES — gain the edge over your 
competitors. Have die Financial Times hand 
delivered to your office at no extra charge and 
you will be fully briefed and alert to all the issues 
that affect your market and your business. 



12 FREE ISSUES 


When you take out your first subscrip- 
tion to the F.T., we’ll send you 12 issues free. 
Then see for yourself why William Un- 
geheuer. Time magazine’s senior financial 
correspondent, describes us as “the paper 
with the best coverage of international 
finance.” 

(fi Paris (01) 42 97 06 23 

And ask Ren Hughes for details. 

FINANCIAL TIMES 

■ — . F-iimp^V Business New s pap m^ 


Have your F.T. hand 
delivered every 
morning 
in Switzerland 


JLf you work in the business centre of 
BAAR. BASEL, BERNE, GENEVA, 
LAUSANNE, LUGANO, LUZERN, ST 
G ALLEN, ZUG, ZURICH or WINTER- 
THUR — gain the edge over your competi- 
tors. Have the Financial Times hand deli- 
vered to your office. Then start every 
working day fully briefed and alert to all the 
issues that afreet your market and your 
business. 


12 FREE ISSUES' 



When you take out your first subscrip- 
tion to the F.T. , we’ll send you 12 issues free. 
Then see for yourself why William Un- 
geheuer* Time magazine’s senior financial 
correspondent, describes us as “the paper 
with the best coverage of international 
finance.” 

0 Genera (022) 311604 

And ask Peter Lancaster for details. 

FINANCIAL TIMES 

— ■■ ■ ■Eom p+'W Rii-onr** Nen-xtvmer ■ 










































































































































































7 ' . : V.v. '.7- 


ctm AT^riAL TIMES WEDNESDAY 


AUGUST 24 1988 


4pm prices August 23 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


n 

tOgh Low Sack 


m 


Ofta 


Dkr.VW-E IHtaMgh LAW OnteCtoaw 
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a Sll 27% 27 h 27% + I. 

12 3% 35, 3* 

832 3$ 9% 5%- % 

0.4 48 21% 21b 21% 

8 1116 43% 41% 41% - 
02 


27% 10% AOS 
7% 2% AMCA 
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2Bb 17 AM Id! pi 2 
84% 28% AMR 
24% IB ANR pi 112 
11>t 9% ARX 
70% 35% ASA S 
22% 0% AVX .080 
66% 40 AbtUb 120 
27% 15% AMMO 1 
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» e% achme sa> 


82 


41 
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S6% . . 

10% 4% Adobe 
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21% 17% Adob pi 140 
12% 5% Advwa 12 

64% 39% AemLf 278 
38% 20%AfllPDa 20 
23% tl Allmans 48 
4% 1% Atom 
53% 29 AuPrd 120 
27% 11% AlrtjFrl JB0 

16% 6%Air0M 


1 23% 23b 23%- % 
10 78 7% 7% 7b- % 
478 38% 38 38% - % 

12 271 16% 18% 18%*- b 
■427 43% 44b 45% + % 
717 17% 18% M%- % 
86 9 % 9% IV % 
7 8% 7 + % 

15% 15% 15% 

18% 18% 1B%+ % 
11% 11 11%- % 
15 35 95 - % 

7% 7% 7% 

17% 17% 17% 

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1 A 18 69 8% 

5J 71584 47% 


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9% 7% AMP dftlCr 96 208 9% 9% 9%- % 

2910 B1 90% 90b- % 


97% BlbAJaPpT 9 
100 86% AIsP pi 9.44 

80% 78 AMP pi B.K 
87 77 AloP pi B28 

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38 14% Alberto JO 

28% 12% AlbCulA 00 
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21070 84 82 84 -1-2% 

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FINANCIAL TIMES WEDNESDAY AUGUST 24 1988 

COMPOSITE PRICES 




AMEX COMPOSITE PRICES 


Mr.TM.IW 


ConUnuM from pnivlout Paso 

if s£££? - - 1$ sj. 

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M ToacapOJB 64 200 37% 37% 37%- % 

22 ToyfM 21 005 36% 36% 35%- V 

7% TnM UO - 1UB 71 ■ #V «V 

14 TWA 336 17% S7 37V 

14 TWA pl£2S 13 271 16% « M%+ V 

22V&0MM44 U T 377 33V KV 33% + % 


21 Tnojoo220i 0311 10 23% 23% 23% 
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07% Tnwe pMTO 94 01 40% 40% 46%+ % 

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00 TkQP pMJB 75- 2MD 01% 01% 01% + % 

24 TrOP pttOO 07 2 26% M% 26% 

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30% Ttavlar 240 7.161 IBB 34% 53% BV- % 

20V TrtOon 43DB 21. 124 21V 21 21%+ V 

20% lift— 71 32 M 000 04% 34V 34%+ V 

14% TriMjr .30. 1330 71* 20% Z7% 27%- % 

20VTHnow 34 25 IT 1064 26% 24% 26V 

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23% U5PG 234 CO • 474 30% 30V 20% 

41%U8ra PH.M 05 12 44% 44% 44%-% 

OVUSOfl 3S276 7% 7 7%+ % 

16% USUCO 56 43 0 62 22% 22% 22% + % 

MVUBrc 140 4312 437 36% 30% 30% 

21 USX 150 4416527* Z7% 26% 27%+ V 

43% UOXpKBW 03 30 60% 80 60 - V 

41% USX pr 360 74 100 40 47% 47%-% 

MM USX M 470 1-32 1-64 MM 

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17%*WI=W 3 . 40 1 20 20 20 - % ’ 

sovunowmaa 1511 «i 3o% 20 % 20% — V 

30 0MNV 131a 07121600 02 80% 61% - % 

23 UaCwp 154 33 01734 01% 81% 31% . 

MVUCart 30 03 77070 21% 20% >1%- % 

4 IMmC 2D 74 •% 0 0 

WVM9N 132 03 0 364 22% 22% 22%+ % 

30 UOBpi 4 CO XW0 40% 40% 40% 



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112 0 10% 
M 227 51% 
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16-10 V V 
36% M% 39% - % 

3 2 V 3 
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16 % 10 1 S% 

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13-10 % 13- W 

24 % 24 % 21 % 

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4% 4% 4% 

25 % 2 S% 26 % 

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B% 8 13-16 813-18 
14% 14% M% 

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10 2 20% 20% 
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13 1166 12% 12% 

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63 5% 5% 

13 64 16% 16% 

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22 123 38 37% 

19 16 2% 2% 

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11 123 6% 5% 

41 227 10% 10% 

15 2 16% 15 
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11 27 03 % 03 % 
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ProiCra 94 2% 

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R»Cap 2* 10 9% 

Rssn A 6 34% 

RW*H n 19 7 11% 

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4pm price* 

August 23 


OtadtoO 

2% 



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313 36 % 36 % 35% -1 

14 3 8 % 6 % 0 % 

27 43 16% 15% 16% 

17 464 4 3V 4 

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2150 11 % 10 % 1 SV+ % 
163 35 0 % 0 % 9 % — % 

106 15 % 15 % 16 % - % 

11 73 9 8 % 0 

57 15% 15% 15% - % 

44 3% 3 3% 

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11 3 0% BV 8% 

5 17 IV IV IV- V 

5 27 1 % IV 1 %- % 

113 4 V 4 % 4 V- V 


12 7 20% 

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52 2% 

35 21 6% 

9 <24 13% 
16 11 12% 


20 % 

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OVER-THE-COUNTER 


Nasdaq national market, 3pm prices August 23 


11 
1 1 


32V 33% 

1 1-16 IVIS-T-U 


3ZJ- *» 

m 

22 + V 

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03 40V UaOlMJM 
14 «3V UaBpa.m 

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19% llVUBhiplUB 
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37% 10 Urtta 
23% T7 Ulartfe 1X0 

11V . 5% UKOM JOa 
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2% i% unafit 
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C% IVUSHdto 
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39% 21% US Stop JO 
60% 42% USMhMR 0*2 

a *V U*Mok 

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22% M UMt *4 
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20 . MV IMvar 40 

30% aovuwcpiao 


CO MOD 46% 
CO MOO Z$% 
1C W* 72 
M. 1330 00 
11.10 204 MV 
COM 000 66% 
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IBM M7 MV 
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JEMS *17 33% 

m: 4 in mV 

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1*372*94 29% 
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6JZ7 3361 34% 
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411 0 M% 


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Saiaa Oooroa ara unoWctsLYaarfy Mgtn and Iowa railacx tba 
pcnlmr 02 Make phaa ta aaiwnt weak. Out oat Oar tatoat 
ftwSna day. Where a apOl or alert dhrtdaod amecrtifiB to 26 
paraanl or more tan been paid, ma yuatm hlgb-only range and 
■OvMand era ahpam to* ttw new a l e rt enly. UrUaae otberwlaa 
n aiad, ratee gi avhland are annual dWOnr aamen a named on am 
Meat declaration. 

a dM dend alao xtraM. batanuaf tale o 4 dMdand plea atock 
dMda w d. -G+tqtddattnB dhrtdanL cld-caHad, d-oew yearly tear, 
e-dlrttad dadarad or paid h> pracadkip 12 momh*. ©-dividend 
In Canadian fanda. aubiacne 18 % notwaatoanee lex. MMoeod 
deetarod adtor apU+cv or (tart cOvidand. J-dMdeod paid Ala 
year, emRMd, defmrad. or no adkm token at 1 a l a a t dMdand 
waa d n*. bdMoeod dadarad or paM iMa year, an aoowmiiettve 
Waua wMi dMdonda In pzraan. n-naw laaua In Aa past 52 
weeks. The hlgh-Urw range begins wWt Aa start el tracSng. 
nd-naxt dsy delivery. P/E prioa-aantlnaa redo. r-dMdend 
dadarad or paM A praeatflng 12 moeAe.plua aaort dMdand. 
a -atock spilt. DMdand* begin with data of epQL sla-aalas. 
t-dMdand paid A stock A p tat art ag OmenAa. aa thnal a d cash 
value on aa+O wtd a nd or a v d la Mbutlon data, u-new yearly Mgn. 
v-tradtng ballad. vHn bertrupKy or receivership or being 
raorgan ro ed under Aa Banknipiey Act or pecuridaa assumed 
by such oempanisa. wd+OaMtwtad. s+Mta n taa ue d arw-MA 
warranto, a n s d M da n d or ax-dgMa. sdtoHMMHaiTlbuAm- n+ 
without warranto, y a x dMdand and sales AhdL yld-yteld. 



. . . at no extra chaise in Belgium, if 
you live or work in the following 
postal districts: 

Brussels — - 1000 , 1010 , 1020 , 1030 , 
1040 , 1041 , 1048 , 1049 , 1050 , 1060 , 
1070 , 1080 , 1090 , 1100 , 1110 , 1120 , 
1130 , 1140 , 1150 , 1160 , 1170 , 1180 , 
1190 , 1200 , 1210 , 1310 , 1410 , 1420 , 
1600 , 1620 , 1640 , 1641 , 1800 , 1900 , 
1920 , 1930 , 1931 , 1940 , 1950 , 1960 , 
1970 , 1980 , 1981 , 1990 . 

Antwerp — 2000 , 2008 , 2018 , 2 Q 2 Q, 
2030 , 2040 , 2050 , 2060 , 2070 , 2080 , 
2100 , 2110 , 2120 , 2130 , 2153 , 2180 , 
2200 , 2210 , 2230 , 2232 , 2241 , 2600 , 
2610 , 2700 , 2710 . 

Gent — 9000 , 9110 ,. 9820 , 9830 , 
9831 . 

liege — 4000 , 4020 , 4200 , 4400 . 
Leuven — 3000 , 3030 , 3044 , 2072 .' 
Korfirijk — 8500 , 8510 , 8550 , 8640 . 
Brqgge- — 8000 ^ 8200 . 

qy Brussels (02) 513 2816 

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0 2040 13 d11% 11%-1 
17 11 7% 7% 7% 

16 5M 13% 13% 13% - % 

0 TTB4 11 10% 10% — % 

331360 1%10-M 1 % - 1-16 

13 IBS 24% 2* 24% - % 

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. ' ' -.'J % >: _ ’.- : '^aMt j 






FINANCIAL TIMES 


Wednesday August 24 1988 


AMERICA 


Dow stands still as bonds 



on economic news 


Street 


BONDS reacted positively to 
two key economic releases yes- 
terday while equities traded, 
quietly in an extremely narrow 
range, writes Janet Bush in 
New York. 

The Dow Jones Industrial 
Average closed virtually 
unchanged, down 0.89 points at 
1,989.33 in volume of only 120m 
shares. 

Monday's Hall of more than 
25 points also came in low vol- 
ume with practically all the 
selling pressure from futures- 
related stock index arbitrage. 

US Treasury bonds rallied 
quite well yesterday. By late 
trading, prices were quoted up 
to point higher. The Trea- 
sury's benchmark long bond 
was quoted & point up for a 
yield of 9.38 per cent. 

The bond market was 
encouraged by both durable 
goods orders and consumer 
prices figures. Consumer prices 
rose a seasonally adjusted 0.4 
per cent in July, towards the 
lower end of expectations. 

Although thin compared with 
0.3 per cent increases in both 
June and May and provided 
evidence that inflation is creep- 
ing slowly higher, bond traders 
still seemed quite pleased. 

This was partly because, 
stripped of food and energy, 
the increase was only 03 per 
cent last month compared with 
a 0.4 per cent gain in June. 


Durable goods orders fell a 
seasonally adjusted ? per cent 
In July, a larger drop than 
most had expected. In addition, 
June's surprisingly large 9.4 
per cent increase in orders was 
revised down to a rise of 8.7 
per cent 

Bonds were given additional 
help by tbe dollar, which 
remained strong in spite of the 
economic figures which were 
marginally less inflationary 
than expected and showed 
slightly less strength in orders 
than expected. 

The dollar, after a brief dip 
on the consumer prices figures, 
rebounded in spite of another 
round of central bank interven- 
tion. At mid-session, the US 
currency was quoted at 
DM1.9125 compared with an 
earlier low of DML8975. 

The failure of the stock mar- 
ket to rally along with bonds,' 
particularly after Monday's fall 
which gave it technical ground 
to bounce, was disappointing. 

Perhaps significantly, the 
Dow index remained under the 
2,000 level throughout the 
morning session. Although 
2,000 Is not regarded as an' 
important technical level by 
chartists, it has some psycho- 
logical meaning for investors 
who are already worried about 
the market's disappointing per- 
formance. The Dow is at its 
lowest level since late May. 

Among featured stocks was 
Insalco, which added $% to 930. 
The company originally 


accepted a takeover offer 
worth $29 a share from a group 
including First Boston, but 
said yesterday that it was in 
discussions with another 
potential buyer. 

Burndy jumped $3% to $16% 
on sews that it had asked its. 
investment bankers to explore 
alternatives for maximising 
shareholder value, including 
sale of all or part of the com- 
pany. 

Hyponex gained $2% to $32% 

in over-the-counter trading 

after the company said it had 
agreed to merge with an acqui- 
sition company controlled by O 
M Scott & Sons. 

Pansophic Systems fell $1% 
to $13% after reporting net 
income in its first quarter 
ended July 31 of five cents a 
share from 14 cents a year ear- 
lier. 

Deere & Co, largest US man- 
ufacturer of farm equipment, 
added $1% to $42% after 
reporting third-quarter net 
paming s up from 33 cents to 
$1.14 a share. 


.Canada 


EUROPE 


Dull, demoralised bourses 
lack a sense of direction 


ANXIETY over interest rates 
and Wall Street's overnight 
losses left most of Europe 
demoralised yesterday as vol- 
umes remained very thin. How- 
ever, most markets ended 
above their lows, unites Our 
Markets Staff. 

MIT. AW held up well thanks 
to a buoyant banking and 
insurance sector, hut trading 
remained fairly thin after Mon- 
day's low L80bn. The Comif 
index finished just 1X23 lower 
at 536.57. 

Insurer Generali, which 
accounts for about 12Vs per 
cent of the market’s capitalisa- 
tion, rose a farther L430 to 
L93.380 in the run-up to its 
rights issue next month. “Any 
positive movements in this 
stock are reflected in the mar- 
ket's overall performance," 
said one analyst 

Banco Ambrosiano rose L160 
to L3.300 amid strong specula- 
tion that a foreign bank is 
building up a large stake. 
There are also rhmours 
Ambrosiano may be merged 
with Banca Cattolica del 
Veneto. thus benefiting from 
the latter’s high profits. Banca 
Commerciale eased L26 to 
L2.599 in the wake of the US 
Federal Reserve's decision to 
request information on its bid 
for Irving Bank. 

FRANKFURT remained 
stuck in a rut, with volume 
still woefully low and trading 
lacking direction. The over- 
night fall in the Dow Jones 
Industrial Average below 2,000 
hit early sentiment, while the 
weakness of the bond market 
and the prospect of higher 
domestic interest rates exacer- 
bated the market's paralysis. 

There was little reaction 
when the Bundesbank failed to 
lift the securities repurchase 
rate, and many investors seem 
to believe another rise in inter- 
est rates is nonetheless on the 
cards, possibly after the bank’s 
council meets tomorrow. 


London 


INFLATION fears pushed Lon- 
don lower following a higher, 
than-expected second quarter 
gross national product figure. 
The FT-5E 100 index lost 14.4 
to 1,817.9. International stocks 
staged a small afternoon rally, 
but most still ended lower. 


Hie FAZ index lost 5.35 to 
477.12 at midsession, reflecting 
the early gloom. Prices ended 
off their lows, however, with 
tbe DAX real time index of 30 
blue chips down 12.02 at 
145&97. Volume was minimal 
at DMl-5bn. 

Bonds fell to their lowest lev- 
els for 10 months, fait by the 
weakness of the D-Mark and 
losses in US Treasury bonds. 
Use yield on the latest 1998 fed- 
eral bond rose to 695 per cent 
from 6A2 per cent 

PARIS closed the August 
trading account on a bearish 
note, with volume still thin but 
swelled by position-squaring. 
Here, too, the preoccupation 
was with interest rates, as 
fears grew that the French 
Government might be forced 
into a rise in line with the 
Bundesbank. The OMF 50 
index ended the session 4.05 
down at 348.48 after recovering 
from its day's lows. 

Midi continued to benefit 
from its higher profits forecast 
and plans for a bigger divi- 
dend, adding FFr13 to FFr1,285. 

In the food and drinks sec- 
tor, Pernod lost FFr6 to 
FFr1,104 after saying it held no 
stake in Irish Distillers and did 
not intend to acquire one. BSN, 
which has been strong recently 
on analysts’ upward revision of 
earnings forecasts, shed FFr50 
to FFr5,000. 

ZURICH was again fairly 
quiet, with no corporate news 
to move the market, and the 
Credit Suisse index eased 2.6 to 


474.6. 

Larger price changes were 
restricted to minor companies. 
“The big movers were all small 
shares,” one analyst said, 
pointing to sharp falls by small 
insurers, which had risen last 
week on speculative interest 

In the banking sector, prices 
dropped after a slight recovery 
on Monday. Union Bank bear- 
ers, which had gained SFi30 
the previous day, fell SFrlO to 
SFT34230. 


AMSTERDAM weakened as 
the dollar slipped, but closed 
above its day's lows after a 
firmer opening on Wall Street 
The CBS all-share index lost 
19 to 94.6. 

Van Ommeren Ceteco, the 
shipping and storage company, 
lost 60 cents to FT 27.10 before 
repenting a rise in first half 
profits from FI 19.3m to FI 
23£m. Steelmaker Hoogovens. 
Are to release half year results 
today, shed EL L60 to FI 56. 

Major insurance companies, 
which begin a spate of results 
today with Amev’s first half 
figures, declined. Amev lost 70 
cents to FT 5L5Q. 

BRUSSELS closed mixed to 
lower in dull trading, as inves- 
tors stayed away in spite of the 
start of a new fortnightly cycle 
in the forward market 

Utilities were the only sector 
to defir the slide, with holding 
company Tractebel gaining 
BFrlOO to BFr7,800 on volume 
of 12,750 shares amid rumours 
of a mystery buyer, and Inter- 
com rising BFr20 to BFr3J60. 


STOCKHOLM closed lower 
in lacklustre trading as a 
result of declines elsewhere. 

Investors’ uncertainty pend- 
ing next month’s election was 
worsened by remarks from 
Finance Minister Mr EjaQ-Olof 
Feldt, who said it was not pos- 
sible to lower Swedish interest 
rates. 

MADRID fell following 
trends in Tokyo and New York 


FT-ACTU ARIES WORLD INDICES 


Caution restrains Manila’s buoyant twins 


M anila’s two stock mar- 
kets, which trade 
identical stocks, are 
among Asia's smallest hut 
most buoyant bourses. 


The Manila exchange' is the 
larger and busier of the two. 

. The markets halve been con- 


MARKET PROFILE 


dCH 


. Tm U J IIP -I 


Philippines 


Before last October’s stock 
market crash, the exchanges 
had grown more than six-fold 
over 18 months as foreign 
Interest increased following 
the removal of President Ferdi- 
nand Marcos from power in 
February 1986. 

The markets, the Manila 
stock ’Evr .h ang p and the Mak- 
ati Stock Exchange, split in 
1968 when the country’s two 
dominant brokerage houses fell 
out and went their own ways. 
Hie exchanges have the same 
market rgnltflHgnHmi but thev 
run their own stock indices. 


the reluctance of foreign inves- 
tors to venture back into 
Manila- Last month thy Manila 

Composite index reached a 
new high for the year of just 
over 880, hut it has since fallen 
back to 782 amid nervousness 
about the political scene and 
the latest oil-drilling aclwnHi. 

It hit a low point of 727 Jn 
April, with much of .the fall 
then caused by the sharp drop 

in copper prices. Mining shares 
were badly affected and strong 
rises in commercial indos- 
trial stocks failed to reverse 
the ti mid 

Last year, share prices 
readied a record high in June, 
when the Manila index cHmhpd 
to 1837. 

A military coup *>mt nar- 
rowly failed to topple President 
Corazon Aquino that August 
hit the market, which was fur- 
ther battered by the global 
crash in October. 

Hie 139 listed shares on each 
exchange have a market cant 
talisation of pesos 66bn 
<$3-2bn). The top 10 shares 
account for 76 per cent of trad- 
ing and the composite indices 


cover tbe 25 stocks that indi- 
vidually y— lff up tbe commer-. 
rial /faflmdTini , mining end ^ 
indices. 


STOCK market FACT CHART 
MANILA 


Trading takes place between 
9 l 3Q am and 12.10 pm with no 
after hours trading. There is a 
negligible over-the-counter 
market. . 


Both exchanges retain 
paper-based trading systems. 
Before full computerisation 
could take place, the two mar- 
kets would probably have to 
reunite - but no siah reconcil- 
iation is in ti gh t. 


Market capitalisation: peso® 66bn ($1«=pesM 20AO, 
ei« pesos 34JJQ) 

Number of shares Hated: 139 

Top 10 stocks, percentage of nwwrc 78% 

Trading hoof* Official - £30 

Average dally turnover. 1888: pesos 80m (comwnea 

total of Manila and Makati Mcftanges) index 

Main IndfcMG Manila composite Index, Mated compose 

SSrortSIerofindS (Manila composite): 782.45; 1938 Mgh: 
880.77 (2S/7);1988 low. 727.42 (24/4) 

Settlement: cash, within five days 


talks 


Makati' is nevertheless push- 
ing ahead with preparations 
for oomputerbased trading and 
Is further abend than Mamin 
thnng h still not far advanced. 
Manila, meanwhile, has made- 
more headway than Makati in 
computerising records of trans- 
actions. 


TW (M a 1MMI SMk P rriM jW II 

- ■ - “ - 


Volumes have remained low 
since October, with a combined 
daily average in 1968 of pesos 
80m — Manila with pesos 45m 
and Makati with 1 pesos 35m. 
When the market was 
approaching its peak of L337 
on July 20 last year, combined 
daily trading volume was 
about pesos 300m. 


Apart from a sinall number 
of traded companies that are 
closely controlled by families, 
most of the mfl T **** ! — about 90 
per — is freely tradeable. 
However, liquidity remains a 
problem and is extremely low 
in the smaller stocks. Cash set- 
tlement is within five days, 
when physical delivery of the 1 
stocks must take place. 

Under tbe Philippine consti- 
tution, foreign ownership is 
limited to 40 per cent of a com- 
pany. As a result, most of tbe 


larger companies have B 
shies for foreign investors. 
Foreigners may own up to 100 
per cent of local companies if 
they are engag^pnmarity ta 
exporting or agribusiness, but 
no such companies are cur- 
rently listed. 

Withholding taxes for corpo- 
rations vary from 20 per cent 
- for Hong Kong investors - 
to 35 per cent for most others. 

Next week: Tel Aviv 


St#* 7 ** 


Richard Gonriay 


ASIA PACIFIC 


ivau. A 


SHARE prices posted a loss in 
quiet Toronto trading as fears, 
of rising interest rates side- 
lined investors. 

The composite index fell 9J34 
to 3.242.02. Declines led 
advances by 442 to 245 on turn- 
over of 21.4m shares. Falling 
gold issues led the retreat 


Trading bedevilled by interest rate worries 


Tokyo 


ANOTHER sharp decline in 
Tokyo yesterday followed the 
overnight fall in the Dow Jones 
Industrial Average below the 
2,000 level, writes Mkftiyo Nak~ 
canoto in Tokyo. 

Tbe Nikkei average fell 
159.23 to 27,919.95, dropping 
below 28,000 for the first time 
in five trading days. Volume 
was very thin at 531m com- 
pared with Monday's already 
weak 631m shares. The Nikkei 
moved between a high of 
28,032.49 and a low of 27.85L49. 
Declines led advances by 587 to 
254 and 185 issues were 

lmnhawg ad. 

Later in London, shares 
slipped further, with the ISE/ 
Nikkei 50 index falling 4^0 to 
L839JL2. 

In Tokyo, uncertainty about 
possible higher interest rates 
abroad and concern that the 
Japanese Government may 
decide to tighten rules on capi- 
tal gains taxes continued to 
cast clouds over the market 

No particular sector showed 
enough strength to give the 
market momentum and only 
issues backed by specific incen- 
tives saw buying interest Fuji 
Heavy Industry, which was 
traded in heavy volume of 
14J28m shares, rose Y35 to Y863 
on the back of its defence-re- 
lated business. Fuji Heavy is 
popular because of its promis- 
ing space-related business. 

Sumitomo Heavy Industries, 
the volume leader at 64.58m 
shares, also rose Y20 to Y895. 
The company has been popular 
in the past few weeks since 
announcing plans for a 
high-speed ship powered by a 
superconductor motor. 

Japan Steel Works gained 
Y61 to Y666 on the back of its 
prop er ty holdings. It plans to , 
redevelop tiie site of its factory 
in suburban Tokyo. The com- 
pany, which has defence-re- 
lated businesses, also benefited 
from the strength in Sumitomo 
Heavy’s share price. 

Nisshin Steel, the fifth most 
heavily traded issue with 
17.85m shares, lost Y10 to 
YL.150. One of the leading steel 
companies, Nisshin had been 
actively bought recently 
because of its relatively low 
share price. 

Keisei Electric Railways, 
which has risen strongly on 
speculation that its subsidiary. 
Oriental Land, is to go public, 
continued to attract interest It 


rose Y90 to Y2JJ10. 

. Mitsubishi (hi, another Issue 
that has been bought sporadi- 
cally in the past few weeks, 
gained Y60 to Y1.100- a was tbe 
second most heavily traded 
issue with a volume of 25.41m 
shares. Mttsuhishi’s popularity 
stems from speculation that 
Saudi Arabia is i n terest e d in 
buying a stake in the company 
and from expectations that the 
industry as a whole win soon 
see restructuring moves. 

Oki Electric, which rose on' 
Monday on news that it is 
planning to begin mass produc- 
tion of 4-megabit memory chips 
next year, advanced Y20 to 
Y1430. Other electricals were 
weaker. Sony lost Y140 to 
Y6910 while NEC decreased by 
Y60 to Y2.150- 

Companies in the tinaru-ini 
sector remained weak. Sumi- 
tomo Bank lost Y50 to Y3^30 
while Fuji Bank dropped by 
Y30 to Y3.150. The weakness of 
financials steins mainly from 
uncertainty about interest 
rates. Securities houses, how- 
ever, declined on news that 


many expect reduced profits in . 
the year to September. Daiwa 
Securities lost Y70 to Y2.810 
while Nlkko Securities shed 
Y40 to YL83Q. 

Steels were also weaker. Nip- 
pon Steel was down Y8 to Y719 
on the third, largest volume of 
20.78m shares.. 

The band market was hit by 
the weaker yen and by stable 
short-term Interest rates. 
Investors were also concerned 
about a possible increase in 
West German interest rates. 
The yield on the benchmark 
105th government bond rose to 
5190 per cent from 5115 per 
cent on Monday. 

Following Wall Street’s fell, 
the Osaka market slipped back 
with the OSE average down 
16745 at 27,06511. Volume was 
thin at 43.20m shares, down 
2pm from Monday. Sumitomo 
Heavy, the volume leader in 
Osaka at &85m shares, rose 
Y25 toY900- 


Roundup . 

THE TREND in Asia Pacific 


markets yesterday was down- 
wards, with Australia falling 
particularly sharply. 

AUSTRALIA fell steeply in 
late trading before the 
announcement of the Federal 
Budget l««t wight. 

E unities closed near their 
day’s lows in *htw trading after 
the earlie r decline in Tokyo. 
The All Ordinaries index 
dropped 1&6 to 1,629-5 an low 
turnover dTSm, slightly down 
on Monday’s 81m. 

The industrial sector and 
bine chips saw the steepest 
declines. Market leader BHP 
fell 10 cents to A$8.40 and 
News Corporation dropped 25 
cents to AS10.40. 

. Profit-taking, following last 
week’s rises~Mt banks and spe- 
cial situation stocks. Among 
banks, Westpac and National. 
Australia each dropped 8 .cents 
to A$5.84 and AS6.42. 

Bond Corporation, the brew- 
frig, media mid property group, 
was unchanged- at A$k20 after 
reporting trebled profits the 
previous day^MIM, the multi- 
national resources group 


which announced a fourfold 
increase in profits on Monday, 
dropped 4 cents to AS2.14. 

SINGAPORE slipped for the 
10th consecutive day in quiet 
trading, but bargain hunting 
lifted shares off early lows. Tbe 
market had fallen in the morn- 
tog following declines on Wall 

Street and other major markets 
the previous day. 

Tbe Straits Times industrial 
index fell 8.71 to close at 
1,067.02 after earlier losing 
21.63- 

Activity continued to be 
dominated by Malaysian specu- 
lative, property and low-priced 
stocks. 


, . j- i 




rv**vn* 


SOUTH AFRICA 


GOLD share prices in Johan- 
nesburg closed slightly higher 
on. a firmer bullion price. 

Other stocks woe mixed fol- 
lowing the release of a trade 
surplus figure double that of 
last month at R973.5nz, but 
still well down on July 1987, 







start 


The 


da?* *4* 


Plaisterers Hall, City of London 
19, 20 &.21 September, 1988 


j r 


This three-day Seminar provides an overview of the traditional operations of the 
City of London together with an examination of its newer markets and activities. 
Speakers will include: 




Philip Warland 

Head of Information Division 
Bank of England 


Jointly compiled by the Financial Times, Goldman, Sachs & Co., and Wood Mackenzie & Co. 
Ltd., in conjunction with the Institute of Actuaries and the Faculty of Actuaries 


NATIONAL AND 
EEG1DNAL MARKETS 


TUESDAY AUGUST 23 1988 


MONDAY AUGUST 22 1988 


DOLLAR INDEX 


Mark Boleat 

Director- General 

The Building Societies Association 


Martin Hall 

Director of Policy and Manning 
The Securities Association 
Director of Public Policy Studies 
The International Stock Exchange 


-David Malcolm 

Deputy Group General 
Ma nager 

Royal Insurance pic- 


Flgures in parentheses US 

show number of stocks Dollar 

per grouping Index 

Australia (87) 151.28 

Austria (16) 84.82 

Belgium 163) 109.73 

Canada (128) 117.37 

Denmark (39) 12134 

Finland 1261 123.78 

France (129) 88.76 

West Germany (100) 72.08 

Hong Kong (461 102.94 

Ireland (18) 131.20 

Italy (102) 71.79 

Japan (456) 162.60 

Malaysia (36) 140.60 

Mexico (13) 149.66 


Pound 

Sterling 

Index 


Local 

Currency 

Index 


Pound 

Sterling 

Index 


Local . 
Currency 
Index 


Year 

ago 

(approx) 

158.62 

97.19 

133.49 

139m 

120.97 


Chris Tracey 

Joint Managing Director 
Fleming International Investment 
Management Limited 
Investment Director 
Save & Prosper Group Limited 


The RtHonJohn Smith, qc,mp 

Shadow Chancellor of the 1 Exchequer 


Peter Rawlins 
Managing Director 
R W Stiirge & Co 


Derek TuUett 

Chairman 

TuUett & Tokyo Forex 
International Limited 


I 


Christopher Johnson 

Chief Economic Adviser 
Lloyds Bazik Pk 


Francesca Edwards 

Associate Director • 

J P Morgan Securities Ltd 


John Matthews 

Executive Director 
County NatWest Limited